Us “Baby Boomers” tend to believe we have accomplished a lot in the years ranging from our roots of hard rock, to the birth of basic internet technologies in the early 1970s. We started our generation with black and white television, 
experiencing everything from the assassination of President Kennedy to absorbing the wonders of man walking on the moon. We end our generation with 7.6 Terabit submarine cables connecting every continent with high speed many-to-many interactive communications and applications.
Communications for many during the early 1960s consisted of telephone party lines, daily newspapers, telegraph, and radio broadcast. While in high school (Richfield, Minnesota), some of us privileged students in more opulent areas had access to computer classes. This consisted of having a teletype terminal attached via low capacity lines to a central mainframe computer – using a service called “time sharing.” Very cool, and very exotic.
Competition for a place in computer class was aggressive, and only a few of us were able to indulge in the excitement of connecting to a machine someplace outside of our class. We didn’t waste a moment of time learning some rudimentary programming routines, and were considered very strange by a majority of students in school, who either did not make the grade for computer class, or simply did not care.
Generation Z
In an opulent city like Richfield, the only real way to communicate with other students or people outside of our community was through the “exchange student” program. One or two students from a different country, such as Germany or Japan would live with a local family, and attend school in our city. This was to both give those students a chance to expand their experiences, but also to give us a chance to interact with students from a different country or culture.
At that time a child in Mongolia would have still lived under Soviet rule, not allowed to travel beyond his or her local community without specific permission. Many children in the Mongolia countryside never made it out of their Aimag (similar to a province or state), and had no idea of the world beyond their own village.
In 1994 Sprint China was asked to support an Internet project in Mongolia, sponsored by several international agencies. Tough job, and working with visionaries such as Dr. Enkhbat Dangaasuren and the late Narantsetseg Baljin, Magicnet Mongolia started delivering basic internet services to the public, with a whopping 64Kbps satellite connection to Stockton, California.
Today, almost any child, even in remote parts of places such as Mongolia, has nearly the same level of network access a child in Rolling Hills, California enjoys. It is normal for a 7 year old Mongolian child living in Ulaanbaatar to have an online chat with others in Mongolia, Germany, the US, or other country. It is normal for the child to use an application such as Skype to call a friend living in Japan or Canada, and it is expected to be available to them 24 hours a day.
Some governments haven’t had the means or desire to fully embrace educational or social globalization, however even the most restrictive national policies are eroding in favor of enlightening their new generations.
You can hardly find a Generation Z (born after 1990) person who does not have their own PDA or smart phone, and maintaining a Facebook page offers no more challenge than putting a paper book cover on a text book presented a baby Boomer.
Technology Diffusion and the Future
If the generation born between 1945 and 1955 could put a man on the moon, invent Internet, Ethernet, and other digital technologies – with a background that did not include television, mobile phones, digital computers, or anything beyond a slide rule, what might we expect from Gen Z babies?
With Hex-core CPUs ready to find their way into laptop computers, SSDs making storage an anecdote, and ubiquitous network access a utility, what is a mind that grew up as a Gen Z baby capable of accomplishing? If your child has a problem with homework and needs help, and simply states “I’ll just ask my buddy in Nairobi, she is really good at physics,” what does it mean for further socio-economic globalization?
Technology Diffusion in Generation Z
Diffusion is the random movement of atoms, molecules, or ions from one site in a medium to another, resulting in complete mixing (Encarta, 1999).
Diffusion of technology in our context has two separate meanings. The first is through education, and the “absorption” of technology into the mental DNA of young people. The second meaning is the mixing of people, cultures, languages, and ideas into young people’s identities at a rate faster than Chingiss (Genghis) Khan absorbed most of Asia.
Each generation from the start of the industrial age till now has focused their efforts on exploiting natural resources, improving their quality of life, developing really scary weapons, and leading the world to the brink of annihilation – both from war and/or environmental disaster.
It is my belief Generation Z now has made a huge leap in available intellectual tools, well diffused into their intellectual DNA, to start unraveling the damage our generations have done, and start using this powerful supermarket of technology to innovate at a rate far outpacing anything in history. They will innovate, and discover things in our world and universe that is far beyond an old baby boomer’s ability to comprehend.
What baby boomers can comprehend is that during the twilight of our watch, we have an obligation to continue aggressively providing the tools needed by later generations to take our leadership “baton,” and see how fast the younger guys can actually run. Young people scattered around the world, capable of meeting each other online, and collaborating without the burden of geography, cultural, racial, religious, or social barriers.
And then us baby boomers can sit back and watch an old episode of Star Trek.
John Savageau, Long Beach
The worst case scenario – a strong earthquake strikes California, disabling the carrier hotel at One Wilshire, disrupting operations at submarine cable landing stations in both the Los Angeles area and central California, with a resulting tsunami hitting Hawaii, Guam, the Philippines, Taiwan, and Japan.
Communications are severed to most of the South Pacific, and severely degraded to allow for only emergency services and national defense usage within the west coast of the United States. Financial and government communications are disrupted and severely limited into Japan, Hong Kong, and China.
Telecom carriers in Singapore, Japan, Hong Kong, China, and Australia work frantically to restore cable, Internet, and telecom capacity from the Pacific submarine cable systems through the Indian Ocean to Europe and the US east coast. Seattle and San Francisco still have some connectivity, however cable systems from Grover Beach to San Diego are inoperable, limiting connections to those which were designed with automatic rerouting through North Pacific cable systems.
Sound crazy? No, it is not crazy, and there is a very good possibility a similar scenario will occur within our lifetime. In fact, when you look at the concern raised when the recent Los Angeles “Station Fire” threatened the telecommunications facility at Mt. Wilson many people were surprised at the potential disruption to both civilian and government communications if that facility were destroyed.
Los Angeles law enforcement uses the transmission towers to manage emergency communications throughout the LA area, fire departments, AM/FM radio stations, digital broadcast television stations – many were single threaded through Mt. Wilson as their primary local communications infrastructure. Not to mention the three letter federal agencies which use the facility for, well whatever they use it for…
Not a New Problem
Several US agencies have looked at this problem for many years. Agencies addressing the problem include the National Communications System (NCS), the Federal Communications Commission (FCC), the National Reliability and Interoperability Council (NRIC), the Department of Homeland Security (DHS), and an additional continuing special taskforce mandated by the president called the National Security Telecommunications Advisory Committee (NSTAC).
As recently as four years ago, an NSTAC report concluded “the telecommunications industry has shown that it is unlikely that a loss of assets in a single telecom hotel would cause a nationwide disruption of the (USA) critical telecommunications infrastructure.” Which may be true for the US infrastructure, as all major American carriers are interconnected at numerous locations scattered across the United States. In short, while the local LA community may be seriously disrupted in the event of the big earthquake, communications between Miami and New York would still be possible with little disruption.
AT&T, Sprint, Verizon, and QWEST are all well-meshed in their networks. As long as they are not sharing the same cable routes, or even in some cases the same actual cables, if the companies are subcontracting their long distance or local loops from other wholesale cable companies such as Level 3, XO, or Time Warner Telecom.
The International Factor
Ten years ago the United States could stand alone in our communications infrastructure. International communications were strong, and submarine cables were in use, however much of the international communications infrastructure was still done through use of satellites. Even if a submarine cable was disrupted, carriers could easily restore their communications through use of existing satellite restoral and recovery agreements.
Now, in the Internet age of high capacity telecom infrastructure, generally provisioned in multiples of 10 Gigabit per second links, satellite capacity has quickly become a fraction of the bandwidth driving international communications. Even the old telephone networks are being integrated by international and US carriers into their Internet infrastructure, often sharing the same circuits are streaming media, social networks, general web traffic, and other entertainment applications.
This will not be as easy to restore in the event California gets the big earthquake we all know is coming.
The Risks and Vulnerabilities Series
This series will look at several aspects of the telecommunications business, including:
- International telecom vulnerabilities
- Government interest, activities, and opinions on the risks and vulnerabilities of both US and international communications infrastructure
- The role of the carrier hotel and internet exchange point in international communications
- Interviews with people on the front lines of communication security
- Recommendations for both the telecommunications industry, and the global user community
I look forward to reader comments, critiques, flames, constructive recommendations, and other ideas related to this discussion. Please add your comments to this blog, and I will ensure your voice is both heard and considered.
John Savageau, Long Beach
I drive a 2004 Ford Mustang with a little “6 Banger” giving me the illusion of driving a sports car. Using the Carbon Footprint Calculator my annual carbon footprint driving the Mustang at 15,000 miles is 6.99 tons. Having used (according to my SoCal Edison bill) 323kWh of electricity during the last billing period, I could be charged for an additional .09 tons of carbon. Looking at the footprint generating from a month of using Metro Rail to go to and from Long Beach to downtown Los Angeles the footprint adds, well it adds almost nothing.
Now I probably use a lot less electricity than the average person, so my electrical carbon load is not too bad. My Mustang is a pig, but not as big a pig as say, an Escalade, which would be almost twice as dirty as the Mustang. Versus a Prius, which would produce 3.2 tons of carbon, I don’t fare so well.
Anyway you look at it, it is a lot of carbon, all finding its way into the environment, ozone, oceans – anyplace carbon can fly or die into the planet.
October is the International Month of Energy Awareness. The US Department of Energy reminds us that “no matter how large the problem may appear, the fact remains that each of us is a part of the solution.” Is it cute political rhetoric, or is it something we need to seriously consider? Do we need to think about “switching off unnecessary lights and equipment, using efficient ENERGY STAR® products and compact fluorescent light bulbs, and driving fuel-efficient and alternative fuel vehicles?”
You bet.
Energy Awareness Month has been around since about 1981, when it was a mere Energy Awareness Week. In 1986 a few forward looking folks in the Department of Energy pushed to extend this week of awareness to a month long campaign envisioned to aggressively bring energy awareness to all Americans. Now, with
the rest of the world, including our fellow Americans, awakening to the realities of global warming, carbon impacts on the environment, and the risks/dangers of living in an energy inefficient world, Energy Awareness Month is finally getting its time in the spotlight.
Carbon Footprints in the Home
The Consortium for Energy Efficiency (CEE) provides some great guidelines and ideas for creating energy efficiency within the home. For those cretins who do not find that interesting, the same “green” thinking is also translated into monthly savings in utility and other energy fees through simple things we can do at home to use less electricity – and still maintain a high quality of life.
Have you heard of the Energy Star program?
ENERGY STAR is a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy helping us all save money and protect the environment through energy efficient products and practices.
For the Home
Energy efficient choices can save families about a third on their energy bill with similar savings of greenhouse gas emissions, without sacrificing features, style or comfort. ENERGY STAR helps you make the energy efficient choice.
- If looking for new household products, look for ones that have earned the ENERGY STAR. They meet strict energy efficiency guidelines set by the EPA and US Department of Energy.
- If looking for a new home, look for one that has earned the ENERGY STAR.
- If looking to make larger improvements to your home, EPA offers tools and resources to help you plan and undertake projects to reduce your energy bills and improve home comfort.
Starting to sound a bit more interesting?
The CEE goes on to reinforce cooperation between the Department of Energy, Environmental Protection Agency, NEMA, utilities such as SoCal Edison and PG&E (look at their websites for some great ideas, rebate programs, and general energy information), and gives a good listing of areas that we should look at in the home to become more energy aware (and save money for the rest of you folks), including:
- Super-Efficient Home Appliance Initiative (SEHA) SEHA establishes “super-efficient” efficiency levels for refrigerators, room air-conditioners, clothes washers and dishwashers. By promoting products that meet these specifications, SEHA complements the ENERGY STAR® Appliance Program and encourages manufacturers to increase efficiency levels.
- High-Efficiency Residential Lighting Initiative The objective of this initiative is to increase the availability and acceptance of energy-efficient lighting (including fixtures), and create a self-sustaining market for this technology.
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Whole House The “whole-house” approach, which applies to new construction and existing homes, sees the house as a collection of interacting systems. The greatest promise of decreasing energy use while increasing health, comfort, and safety is to create a cross-disciplinary understanding of the fundamentals of these systems.
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High-Efficiency Residential Central Air Conditioning and Heat Pump Initiative This initiative promotes high-efficiency specifications and proper installation for central air conditioning and heat pumps. In 2007, CEE revised its Residential HVAC Installation Specification, a document that defines energy-efficient installation practices
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High-Efficiency Gas Heating Initiative By promoting high-efficiency specifications for gas furnaces and boilers, the initiative is increasing demand for this equipment. The proper installation of energy-efficient equipment is another key element of the program.
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Consumer Electronics Initiative CEE’s Consumer Electronics Initiative aims to increase the energy efficiency of consumer electronics, focusing on televisions, set top boxes, and computers. As part of this initiative, CEE provides support to members who are considering running efficiency programs in this area.
Rolling in More Green Incentives
The Pickens Plan website gives us further incentives to think about energy efficiency. In addition to the long, long listings of environmental reasons why we should not continue to trash our planet, the financial incentives to get “green” keep coming. Are you doing a DIY (do it yourself) upgrade to your house? Ka-Ching, possibly another $1500 tax credit.We discussed simple things in earlier posts like using solar-aware tiles on your roof. Which, if using the highest efficiency tiling materials could save a household in Phoenix up to 70% in the cost of cooling.
A couple of interesting facts from Corning:
- Adding efficient insulation in your home can save up to 20% on your cooling and heating bills
- Turning your thermostat from 72deg (F) to 65deg can save 10% on heating bills
- Using single pane windows can cause serious heating and cooling loss, possibly adding another 25% to your cooling and heating bills
- Using energy efficient light bulbs can reduce your lighting bill by as much as 50%
- Old appliances, such as refrigerators, ovens, dryers, and washers can account for 20% of your energy consumption – go to Energy Star appliances
- Do you have a fireplace? An open damper, if left open, is about the same as leaving your front door open during the winter or hottest day of the summer
Wow, that is a lot of potential savings.
Just checked with my family in the nether lands of some remote outpost in Minnesota. The power usage is
around 2450kWh in January this year. In an old house. 1.69 tons of carbon just from the electricity used in the house. If you add a small village like Duluth, MN, with a census of 90,000 people in 2000 (lots more now), and assume 4 persons per household, you will come up with roughly 22,500 households. If you take off 10% for my old inefficient childhood home, you will still get 1.53 tons per household.34,425 tons of carbon in January produced just by households in Duluth. We are not adding industrial buildings, commercial buildings, Superior (Wisc), the Port of Duluth, the taconite processing plants, etc., etc., etc., and you will see even quaint little Duluth is providing plenty of fuel for the north woods to use in their vocation of providing photosynthesis services for northern Minnesota.
Now, if we could find a way to reduce that carbon footprint by around 40% just by changing a few things around the house and office – that is a huge carbon footprint savings. Oh yes, for you non-tree huggers out there it also represents a big bag full of money.
Are you angry about this topic? For? Against? Weigh in. At least we are accomplishing our objective to help create improved energy awareness.
Next time we’ll start chiming in on other related issues such as recycling, water conservation, and other fun topics that are nonetheless important to ensuring our next generations have a planet that will support and sustain a great quality of life for all.
Happy Energy-Aware October!
John Savageau, Long beach
“If we look at cloud (service) in a global sense, not just as my service or your service, or my country or your country, then IPv6 is part of the future and the solution.” (Bert Armijo, SVP 3tera)
IPv6 is hitting everybody in the Internet industry on a global scale. 3tera recognized early in the evolution of cloud products that IPv6 was critical for long term, and short term development of their AppLogic product within both public-facing Internet services, as well as cloud deployments within the enterprise. The need is real.
The IPv4 Reality 3tera Faced
The Internet operates with devices connecting to each other on a global scale. Each device, wither a physical switch, server, or computer, has an address. Each application, piece of data, and content is located in the Internet through use of an address. Everything in the Internet uses an address. Currently address defined in the Internet Protocol Version 4 (IPv4) is the most widely used series and sets of addresses. And we’ve used up most of the available addresses.
The American Registry for Internet Numbering (ARIN) is very clear on the dangers of ignoring the velocity of IPv4 address depletion. ARIN is very clear that less than 15% of the available IPv4 address space remains for distribution in the global community, and if depleted, the Internet will stop growth at that point. There may be temporary measures and “work-arounds” to get us through the near term, however the cold hard fact remains that our Internet is in danger of running out of address space.
In a notice sent to the US Internet community they were very clear in a couple of points what will happen if the US Internet community ignores the need to adopt and migrate to IPv6:
BE IT RESOLVED, that this Board of Trustees hereby advises the Internet community that migration to IPv6 numbering resources is necessary for any applications which require ongoing availability from ARIN of contiguous IP numbering resources; and,
BE IT RESOLVED, that this Board of Trustees hereby requests the ARIN Advisory Council to consider Internet Numbering Resource Policy changes advisable to encourage migration to IPv6 numbering resources where possible. https://www.arin.net/knowledge/about_resources/v6/v6-resolution.html
While IPv4 gives the Internet-connected world about 4.2 billion address, IPv6 gives the world around 3.4 x 1038 addresses. That is a bunch of addresses… Enough to get our planet through a couple more generations of Internet users, and well enough to connect virtually every possible virtual or physical device we as a species are likely to need in the next thousand years or so (OK, maybe a “forward looking statement”).
3Tera Takes on IPv6
The Los Angeles area is good place to meet the folks at 3tera, familiar faces at local industry and community events. Sometimes considered scary in their vision of the network and applications-enabled future, sometimes considered really good guys who are a lot of fun to talk with at a conference, or in the parking lot after an event. Normal guys, until they start talking about their trade. And 3tera guys are very serious about their trade.
Make a seemingly simple comment like, “what have you done in 3tera’s product AppLogic for developing IPv6?,” and you are awarded with a cold stare, silence, and the fear you have either said something so incredibly stupid that it is a conversation killer, or you have struck a nerve.
With Peter Nikolov (President, CTO, and COO) and Bert Armijo (SVP Sales, Marketing, Product Management, and about everything else…) the IPv6 nerve ran deep, and understanding their position in the cloud computing market, the critical issue of IPv4 depletion, the enabling qualities of adopting IPv6, and the reality our planet will need leaders in the IPv6 space, 3tera rolled up their sleeves, put more coffee in the room, and started breaking down the problem.
And on October 1st, 3tera formally launched IPv6 support in AppLogic
While in the US we have started creating awareness in the need to move to IPv6, Bert reminds us that overall, the urgency to accelerate IPv6-enabled applications and network support is more acute in Europe and Asia than in the United States. “Internationally there are fewer IPv4 addresses available (through the regional Internet address registries), addresses are harder to order (longer and more complex justification process), and are much more expensive.”
Thus 3tera has recently received much more interest in their IPv6 product planning and roadmap from both Asia and Europe than even in the US, which should also serve as a wakeup call for Americans.
What Does 3tera’s Implementation of IPv6 do for the Client?
Bert Armijo understands that building an IT infrastructure in a company is difficult enough, without the additional burden of planning for migrations, restacking applications, renumbering applications, and deploying those applications is tough. The whole philosophy of building into a cloud is to enable rapid deployment of presence and applications, and be able to control the cost of labor and capital needed for both organic and season (event driven) growth.
“We wanted to break this problem down to the simplicity of a software appliance,” advised Bert. “We built IPv6 support into Applogic (3tera’s cloud operating system and main product) as a drag and drop appliance, which when using an existing (Applogic-enabled service) would allow the user to drag and drop the IPv6 appliance into their application and automatically configure the application for IPv6 support.”
“…until now, IPv6 adoption has been slowed by the perception that it requires both support on the client side and complex code changes in applications. With its AppLogic cloud computing platform, it is no longer necessary to make changes in the configuration of the software in order to be able to support IPv6, while still keeping the data available to IPv4 users.” (from 3tera PR)
This of course works from the ground up as well, offering support to build infrastructure in native IPv6. Something the Asians and Europeans are jumping on, and something the American IT community should seriously consider.
Bert goes through a list of applications that are being made aware of IPv6 within clouds, including mobile telephony, video distribution, and security. However the most urgent customer demands fall into both disaster recovery and security implementations through the cloud.
While it is clear cloud has great support, and is starting to meet customer expectations for application and resource management – such as being able to move and schedule resources based on time or geography, there are a couple of interesting implications which are becoming apparent.
The Intercontinental Cloud
“First production implementations (for IPv6 in AppLogic) are for VPNs,” said Bert. “Predominantly for VPNs between continents, such as Asia to the USA, and Europe to the USA.”
Using IPv6 within a wide area distributed network, with the advanced security potential offered within the protocol, brings up some interesting ideas. Such as what is the future of wide area MPLS networks?
If the cloud offers the same level of security, portability, and ability for applications to easily move large data sets within a wide area, both for proximity-based process, least-cost processing, and disaster recovery purposes, then we might have some very interesting developments in the future.
What Next?
There are clearly many more aspects of 3tera’s IPv6 implementation into their AppLogic product, and it is still very early in the development process. Other cloud vendors will eventually bring out their own versions of IPv6 support. Eventually the American IT and Internet industry will awaken to the urgency of not only IPv4 depletion, but also start becoming more involved envisioning what other applications and services may emerge or become possible through a network and cloud resource world running IPv6.
Verizon Wireless will drive their LTE -> 4G network on IPv6, and the entertainment community is frantically learning what the protocol can do for the future of video. President Obama’s CIO has laid down the gauntlet on the US Government to adopt IPv6, and the Asian/European community is beginning to look at the US Internet market as a roadblock in global technology development.
We need to keep our eyes and minds open on what is happening in the IPv6 world, as well as look inside at our own businesses and organizations. We are rapidly approaching one of those points in history where our future will be defined based on our ability to plan ahead for a disruption in technology, the impact of market globalization on even mom and pop businesses (I can order breakfast cereal over the Internet!).
IPv6 will be part of that future. 3tera will be part of that future. An exciting future, and we cannot wait to see what emerges from 3tera’s research and development team next.
John Savageau, Long Beach
Sitting at a local coffee house wondering why the free wireless internet access is slow, it is easy to be indignant. Indignant that the coffee house owner could possibly be so arrogant as to provide poor quality Internet access while I camp out with an hour old latte, updating important Facebook communities with my plans for watching television this evening.
How are we supposed to live like this? Are we supposed to live like we are in a third world country while slurping our specialty coffee?
A third world country like Ghana, Vietnam, or Palestine? If I was living in say, Somalia, I would be one of 1.14% of people within the country that have Internet access. In fact, according to the United Nations Conference on Trade and Development (UNCTAD), in all of Africa there was only 4.7% of the entire population with access to Internet-enabled infrastructure or technology.
Why do we care?
Consider this – when an economy fails, and people get hungry, what is the first thing they do? Well, in most cases they fall into either a war, or become refugees. In most cases a combination of both. When you have large numbers of potentially uneducated, poorly trained refugees entering your country or society, you have a burden on your own economy and infrastructure.
On the other hand, if developing countries have access to technology, such as that made possible through Internet and other information and communication technologies (ICT), there is a much better chance those countries will be better positioned to not only improve the knowledge and abilities of people in developing countries, but the potential of creating an environment to stimulate employment and trade.
The faster we advance and innovate in developed countries such as the United States, the wider the ICT knowledge and capacity gap becomes between us and the developing world. ICT drives the potential for a developing country to develop many of the basic skills needed for a country or society to compete, or at least become functionally competitive in their region.
The key to becoming a knowledge economy is education. Basic ICT infrastructure is required to bring the tools to a country allowing students and workers to gain the knowledge, skills, and training needed to function in the modern world.
Who Drives ICT In the Developing World?
Many Americans understand the value of supporting ICT infrastructure projects. Bill Woodcock from the Berkeley-based Packet Clearing House (PCH) leads a committed group of engineers who not only spend a lot of time evangelizing ICT development, but also roll up their sleeves and provide assistance in locations around the world needing direct human training and support. The PCH is a “proponent of neutral independent network interconnection and provider of (Internet) route-servers … worldwide. The PCH provides “equipment, training, data, and operational support to organizations and individual researchers seeking to improve the quality, robustness, and accessibility of the Internet.”
The PCH team travels the globe, offering their services to any country with a need.
John Gerlich, a former “lifer” telecom engineer from Las Vegas, does similar work, spending most of his pre-retirement time giving back to the telecom community in need. Splitting his time between locations such as Ghana and Palestine, his motivation is giving people the tools to communicate. Makes no difference if the WorldBank is funding his projects, USTDA or USAID – the end justifies the means. His success is delivering a new ICT infrastructure to a location where none existed, or there was a limited ICT capability, before he arrived.
International organizations from around the world have tried promoting development of ICT, some with great success, others stuck in international bureaucracies and politics that slow down projects, and some (mostly independent non-governmental organizations) which are able to operate and contribute with little or no politics. Some very aggressive organizations supporting ICT infrastructure in developing countries include:
- UNDP (United Nations Development Programme)
- US AID
- JICA (Japan)
- ZDT (Germany)
- US TDA
- And others
Some Additional Thoughts on ICT and a Knowledge Based-Economy
When was the last time you went to a fast food restaurant? Did you notice the counter staff had microphones, and entered the fast food order into a computer for processing within the “cloud” of the restaurant? Is it possible you cannot even work in a fast food restaurant without a good diffusion of ICT knowledge in your life?
Now consider a world where nearly half the people cannot even function at the level that would allow them to take an order for a hamburger. As we in countries such as the US continue to focus our research and development energy on advancement of cloud computing, 4G, and determining if there is water on Mars, there is a very large percentage of the global population that would not be able to turn on a laptop computer.
The UNCTAD says that even basic access to and knowledge of basic ICT “can make a substantial and positive difference to the economic performance of developing countries’ companies and businesses.” Access to technology and ICT knowledge has a proven positive impact on productivity and business success. For developing countries, this productivity may result in improvements in environmental impacts of doing business, better quality of life, better use and exploitation of national natural resources, and better communication and appreciation of everybody’s place in a global economy and community.
Some Final Selfish Thoughts on ICT in Developing Countries
As I take my feet off the railing facing the pier jutting into the Pacific Ocean, and begin turning off my laptop computer, I see a group of recent economic immigrants scrounging for the basic necessities of life. They are happy to be in the United States, but still hungry. Coming to the United States has not solved their life problems. They are confronted with limited job opportunities based on the economic situation, lack of training, lack of language skills, and lack of education. They are preyed on by human coyotes representing gangs and the vile “underworld” of refugee life.
I know the same scene is repeated in Europe, Canada, Japan, Malaysia, and other countries supporting large refugee and immigrant communities.
If those persons had access in their home countries to adequate education, ICT infrastructure, and the resulting potential business opportunities. Access to the cross-border knowledge and communication needed to support trans-national business. Access to knowledge-based jobs, and support from governments well-educated in the power of societies with strong diffusion of ICT knowledge to contribute and function in a global community.
There are many people and institutions committed to making this happen. While we continue to knock off lattes and scones at the coffee shop, they are on the edge, working with governments to develop policies, as well as breaking finger nails installing ICT infrastructure shoulder-to-shoulder in the underprivileged world.
I applaud the efforts of that community, and urge all of us to take a moment or two in between funny cat videos on YouTube to learn more about how we can make the world a better, safe, and productive place through knowledge. Rock on Bill and John, and all the others out in the global field tonight helping others.
John Savageau, Long Beach
Google’s CEO Eric Schmidt refers to Twitter as a “poor man’s email.” For millions of individuals, small business owners, and even emergency services organizations, Twitter is rapidly becoming an integral part of their business strategies and personal lives.
That fact is not lost on the private equity and investment communities. Twitter confirmed a large investment on Friday, estimated at $100 million dollars, with a posting on their website:
“Yesterday we closed a significant round of funding with a group of investment firms that we’re excited to publicly thank: Insight Venture Partners, T. Rowe Price, Institutional Venture Partners, Spark Capital, Benchmark Capital, and Morgan Stanley”
Social media is touching all of our lives. Even in the early stages of social media development, it is hard to talk with any network or tech-savvy person without having a conversation that is fairly intelligent on the topic. Some think social media communities and applications are a complete waste of time, some are finding creative ways to make tremendous amounts of money, and others are simply indulging in bringing together long lost relations and newly found relations in an instant contact “matrixed” tool.
Twitter, mentioned frequently in a media storm following the latest investment round, is thought to have a valuation of around $1 billion.
While it is difficult to place a hard monetary value on social networking, many investors are starting to jump on the social media venture bandwagon. Microsoft invested $240 million in Facebook, Digital Sky (a Russian company) another $200 million, all in a company that has only recently starting showing signs of generating income. Valuations change depending on who you talk with, largely based on their opinion of social networking. However one fact remains, social media sites are starting to attract serious interest and money from the investment community.
Why? Because even though social media sites and technologies are in the early “stone age” of development, we do understand how this method of bringing people, industries, and events together in a tech-driven community that allows instant global notifications of everything ranging from who is feeding their cat to instant emergency notifications of wild fire evacuations in California.
Twitter has “Become a Verb”
In 1999 we worked hard to startup a new data center business and communications operation for Level 3 Communications in London. It was fairly early in the days of SMS, but gateways allowed transmission of email messages into the SMS system, allowing us to send instant notifications from network management and monitoring systems to both email and mobile telephones.
In addition, as part of our business continuity planning, there was a very clear requirement for notifying individuals, including management, of events that may require a response, notification, or could potentially result in public interest in some level of our business.
The Level 3 software developers in London wrote a very clever, sophisticated web-based notification system that allowed us to meet all our notification and event-logging objectives. Basically a one-to-many broadcast network transcending mobile phone networks, email, pagers, and automated or human information sources. The only real limitation was the length of message, which could either be truncated or rejected based on the individual mobile network’s capacity.
Twitter takes that to a whole new level.
Twitter encompasses all the basic “food groups” of human communications. It supports one-to-one, one-to-many, and many-to-many models of communications. Twitter also supports both interactive and non-interactive (or real time) communications. Your “tweets” are transparent to the media used for either sending or receiving communications. A tweet doesn’t care if you are currently preferring a web browser, a mobile phone, or an email account – it will find you wherever you want it.
Twitter is Understood, Sort Of, and Has Our Attention
Let’s face it, aside from the fact Twitter works, and meets technical specifications and promises, possibly the most compelling reason we’ve adopted Twitter is the cost. It is free. I can send a thousand tweets, and the cost to me is the same flat rate – free.
What does it cost me to use Gmail, Yahoo Mail, or MSN Mail? Nothing, it is free. The only cost to me is the amount charged for accessing the Internet or mobile telephone network. How do they make money? Advertising. Same as the soon-to-be-former print media industry, such as newspapers.
Twitter is taking the cost and flexibility to another step. They have published some of their application programming interface (API) details, allowing private or independent application developers to “plug in” to Twitter’s platform.
An important point – Twitter is, at its lowest common denominator, a communications engine. That engine can be expanded on with much more powerful application support, taking advantage of the powerful interactive and non-interactive design.
Can Twitter Make Money?
Twitter, unlike other social media upstarts like LinkedIN and Facebook, has yet to make any money. Investors, no doubt, are also struggling with that question, and will also, no doubt, force the issue. Is it through introduction of premium services licensed via their APIs? Will our 140 character “tweets” now be truncated further to allow introduction of a MiniURL from an advertiser into each tweet?
Biz Stone, Twitter co-founder, told Reuters recently that “Twitter would not take advertising this year.”
Maybe Twitter is a special case, and will get a free pass on the need for revenue and avenue to “exit” for investors. Not likely. More likely, the development of “plug in” applications that will not corrupt the basic communications engine, such as the addition of geolocation features for both business and emergency services hold a key.
Licensing the communications engine to those who will “plug in” to the platform could be the higher value we are looking for in Twitter. Much like the basic infrastructure of fiber optics, wireless, utilities, and our freeway system, Twitter’s value could be in licensing fees for the additional value layered on top of the basic engine.
Or, other smart people may have already found an answer. Such as those willing to add another $100 million into the investment pouch.
Our User Role
As users we will eventually tire of sending meaningless, worthless noise tweets. The more users become aware of Twitter’s powerful communications engine, even higher value applications will emerge, taking advantage of Twitter’s communications innovation.
Whether it is ultimately Twitter, or some next-generation of Twitter, the concept is valid, and will become a part of the “matrixed” future. This is a good time to take Twitter out for a test drive, gain some tacit knowledge and experience in both social networking and Twitter’s communication engine, and plan for what role this will play in your personal and professional future.
John Savageau, Long Beach
“More than 90% of startup companies around San Diego compensate the founders and senior staff with stock options, grants, or restricted stock” advises Mike Kinkelaar, Partner at Procopio, a San Diego Law Firm.
Mike joined three other panelists discussing “Sweat Equity” and senior management compensation at the San Diego Software Industry Council’s Entrepreneur’s Forum Thursday evening in San Diego (SDSIC).
Sweat equity refers to “the efforts of executives or other shareholders into a company. This does not include money that is put into a business, which is financial equity. It is the time and knowledge that an individual or a group of individuals put into a business to make a result.” (BusinessFinance.Com)
The panelists represented a very diverse group including lawyers, a couple of serial entrepreneurs, and a CPA who was very familiar with assisting start up companies and their executive compensation plans. Those members were:
- Joe Perohit, serial entrepreneur and CEO of EcoLayers
- Mike Kinkelaar, partner at Procopio
- Daniel Cunningham, serial entrepreneur and CEO at DPC Corporation
- Timothy Willis, CPA at Mayer, Hoffman, and McCann P.C.
Who deserves Sweat Equity Compensation?
The panel discussed this is great detail during their panel discussion, as well as during the Q&A session following their panel remarks. After a bit of debate, the panel and attendees finally settled on the following model for sweat equity compensation (SEC):
- Those who contribute to the company in early stages who are willing to accept ownership and shares in the company rather than pure cash compensation
- Avoid SEC grants or compensation for mercenaries, or those who may leave the company as soon as their shares are vested (Joe)
- Those senior people who are already financially stable, and will be able to stick out the early phases of the company without a desperate need for cash (Mike)
- Younger people, newlyweds, new home owners, YUPPIES with expensive tastes in cars, etc., are not generally good candidates for high levels of sweat equity, as they will have a need for higher levels of cash, and will probably not be able to stay in a startup for a long period of time while waiting out the valuation of their potential stock shares
- Those who offer a very unique contribution to the startup company. This could include engineers with the intellectual property needed for the company’s product, or those who are needed for the founders to go to investment bankers and the market for additional development funding
Understanding the Types of Startup Sweat Equity Compensation
The panel introduced and discussed four major types of SEC, and went into a bit of detail on the descriptions of each. While there are obviously clear legal and financial descriptions available for each category of SEC, it was refreshing to hear the panel paraphrase those categories.
- Stock/ownership grants. This is really straight ownership of the company. Each stock grant has value, and presents a voting right for the company. This should only be considered for the founders, and possibly one or two C-Level executives. Grants are considered as income to the IRS and state.
- Stock options. Given more freely to employees. Most often these are incentive grants, either allocated as a signing bonus, or as additional compensation for better performance. Vesting period is normally around 2 years, at which point the employee is eligible to purchase ownership in the company.
- Warrants. Normally only issued to financiers and banks – not recommended for employees or senior management. This is legally considered a form of stock option.
- Non-Incentive Stock Options. This is more on the line of friends and family options, and given to those who would not normally receive an option based on performance or other incentives.
Of course there are other forms of stock, ownership, and management of those forms of equity distribution, however the above are those most commonly used as tools by startup companies to provide additional ownership incentives to owners, employees, investors, and financiers.
Setting up Your Sweat Equity Compensation Plan
All panelists were in violent agreement on a few major points. The main point is to ensure you consult with a lawyer when legally setting up your SEC plan. Mike emphasized this is not a lengthy or expensive process, as all reputable law firms have this plan on the shelf. With the number of startup companies emerging each year, law firms deal with the SEC plan as a routine part of the startup process. It is well-understood, simple if done up front in the startup process, and not difficult to understand.
Additional points made by the panel included:
- Consult with a local small business bureau. Most cities or counties have a very good group of volunteers and professionals happy to assist startup companies with their structure and compensation planning.
- Keep your legal documents as simple as possible.
- Make sure your SEC documents are complete – do not defer items to a later, this will nearly always result in unforeseen tax and legal issues.
- Set up the volume and percentages of shares allocated to grants, options, and warrants at the beginning, again even if you do not plan to allocate right away.
- Ensure the founders and early stage recipients of SEC fully understand the compensation plan, as most problems and legal disputes with ownership and options occur with founders or senior SEC recipients who leave the company, are disgruntled, or have other issues with the founders.
- Establish a qualified stock option plan as quickly as possible – even if you do not plan to use sweat equity compensation in the early stages. It is best to have this legal framework in place from the beginning.
- Do not allow accelerated vesting of shares for other than founders or C-Level executives. This may result in a potential buyer finding the cost of acquisition much more expensive due to the ownership of shares becoming a higher cost to the buyer.
Some Additional Considerations Concerning Employees
Most employees do not understand the concept of stock options, grants, and taxation. Many employees do not understand items as simple as grants being considered income, and options being considered something for which you eventually will have to pay tax.
There are many people who get hung up in the percentage of a company they will own due to grants and options. They do not understand that the only value to stock ownership percentages is when the share gives you the power of vote – and that vote is only useful when it has value within the articles of incorporation, or when it is not overruled by the board of directors.
Many people still believe that percentage ownership is the highest priority, when they should understand the only value of shares is actually when you are receiving distributions (unlikely with a startup company), when you sell your vested and common stock shares, or when an equity event (sale of the company) results in a new ownership “buy back” of your shares. The only value of shares is when you sell the shares and receive cash for those shares.
Dilution of share percentage ownership in a company is normal, and expected. This will only become more apparent as the company continues to grow, receives additional investments, is acquired, or becomes a public company. In short, control by a small group of individuals will be diluted if the company is successful.
Employees must also fully understand the tax implications of all categories of SEC. many states, including California, allow the employee to either pay for the value of an option or grant up front, or defer to a later date. Many, many young employees who do not understand the concept of stock options find themselves with huge tax liabilities when their options vest. This should be explained and clear to employees up front so they do not both have a shock, as well as become disgruntled and ineefective if they are hit with a bad tax situation.
There were many more topics discussed, impossible to codify into a single blog. However a great panel, great audience, and a good use of a Thursday evening in Southern California.
The SDSIC is a great, Aggressive Organization Helping Entrepreneurs and the Tech Industry in San Diego
Silicon Valley – keep your eyes open to the south. San Diego is a very robust technology community, and organizations such as the SDSIC are focused on making it grow. There are many retirees from US and international companies settling in the great communities surrounding San Diego, and many of those successful people are starting to give back to the community through organizations such as the SDSIC.
There is a great energy in the community, with very bright people being pumped out of schools such as San Diego State University and the University of California at San Diego. Both schools have robust tech programs, and both are well-respected on a national and global scale.
Another “Well Done” to the SDSIC, thanks to the panel, and we’ll see you next time (check out the SDSIC schedule at http://www.sdsic.org/events.aspx
John Savageau, Long Beach
“We cannot know what tomorrow holds on the Internet, except that it will be unexpected.”
The new FCC Chairman, Juliius Genachowski, addressed a group of journalists and industry experts at the Brookings Institution on Sep 21st, focusing his discussion on reigniting the topic of network neutrality and “Preserving a Free and Open Internet.”
Quoting early innovators and leaders of the Internet, including Tim Berners-Lee, Genachowski reinforced the idea the Internet is intended as a “Blank Canvas, allowing anyone to contribute and innovate without permission.” An exciting idea, and an exciting confirmation the US Government sees the Internet as infrastructure. While carriers such as Verizon and AT&T should be able to add value to their customers, the basic premise of Internet access is one of an onramp to the rest of the Internet-enabled world.
“The Internet’s creators didn’t want the network architecture — or any single entity — to pick winners and losers.”
Genachowski believes intelligence and innovation within the Internet lives on the edge. 
The network should not determine who will or will not be successful on the network, the value of applications and desire for users to support those applications determines success or failure. The value of a Twitter, eBay, or Yahoo to a community determines growth and success of those services – not the underlying pipes provided by networks and carriers.
“…the genius of American innovators is unlimited; and that the fewer obstacles these innovators face in bringing their work to the world, the greater our opportunity as citizens and as a nation.”
We haven’t even scratched the surface of what the Internet-enabled world may offer us as a nation, or members of the global connected community. Our innovators and creative thinkers need to have access to a platform which offers a “blank canvas,” which offers unlimited freedom for users to develop ideas and new applications. The reality is young Internet users have the network, applications, and concept of a network-enabled world much more deeply diffused into their entire life and thought process than those of us who are making decisions today.
Those young people will come up with ideas which our generation cannot even comprehend today. Who would have thought a utility such as FaceBook, started in 2004, would now support more than 300,000,000 users? What is the next generation of Twitter, FaceBook, or smart grid technology? Where do we go with education and interpersonal communications?
Genachoski noted that “nearly four million college students took at least one online course in 2007, and the Internet can potentially connect kids anywhere to the best information and teachers everywhere.” Driving this further down the educational stack allows us to believe that within a short period of time, children in one-room schools in a remote part of Montana will have the same access to education as children at Peninsula High School in Rolling Hills Estates, California.
This requires our carriers and network providers to continue building the big, fat, dumb pipes needed to deliver broadband access to every community in our country. This is infrastructure, no different from a roads, water, or electricity. Do we need, as a nation, to pay a universal services fee or tax to support development of national (and global) infrastructure?
Absolutely
Do we need to give control of the content and services running over the infrastructure to individual commercial telecom carriers and service providers?
Absolutely not
The Six FCC Internet Principles
Chairman Genachowski intends to ensure that doesn’t happen. He acknowledges that “we’ve already seen some clear examples of deviations from the Internet’s historic openness.” And continues “the rise of serious challenges to the free and open Internet puts us at a crossroads. We could see the Internet’s doors shut to entrepreneurs, the spirit of innovation stifled, a full and free flow of information compromised. Or we could take steps to preserve Internet openness, helping ensure a future of opportunity, innovation, and a vibrant marketplace of ideas.”
To ensure the Internet in the United States continues to support the free, open nature of the network, Genachowski proposed two additional principles be added to the existing four principles of network neutrality, originally established by the FCC in 2005.
- The fifth principle is one of non-discrimination — stating that broadband providers cannot discriminate against particular Internet content or applications
- The sixth principle is a transparency principle — stating that providers of broadband Internet access must be transparent about their network management practices
Both principles are good, intending to ensure telecommunication carriers and Internet Service Providers/ISPs do not make decisions on what content is available on their networks, nor will the carriers and ISPs prioritize applications or services based on network management decisions or controls. The individual networks should never determine who will be the winner or loser, the only determination should be on whether or not users actually want to support that service or content.
The six principles of network neutrality will now include:
- Consumers are entitled to access whatever lawful internet content they want
- Consumers are entitled to run whatever applications and services they want, subject to the needs of law enforcement
- Consumers can connect to networks whatever legal devices they want, so long as they do not harm them
- Consumers are entitled to competition between networks, applications, services and content providers
- Service providers are not allowed to discriminate between applications, services and content outside of reasonable network management
- Service providers must be transparent about the network management practices they use
What do Other Countries Think about Network Neutrality?
Canadians are also confronting the idea of network neutrality, with the CRTC (Canadian Radio-Television and Telecommunications Commission) planning to review their own existing policies. The CRTC is looking at whether additional network neutrality policies are required and what they should be. The CRTC is holding a series of hearing on the topic and is planning to present their decisions and finding later this year.
Many Canadian ISPs and carriers ISPs do not believe net neutrality policies are needed. Those providers believe the Canadian Telecommunications Act already is strong enough to prevent abuses as feared possible in the US by the FCC. Others note that this may not be the case, citing issues such as the CRTC deciding in favor of the networks on topics such as traffic shaping and management of peer-to-peer traffic (such as Bit Torrent). (CBC Canada)
Large Content Providers Change their Stripes
Google, Microsoft, Yahoo – all were very vocal in their support of network neutrality during the initial debates in 2005. Who can forget Vint Cerf’s passionate speech discussing the free and open nature of the Internet?
That is starting to change. According to the Wall Street Journal, all of the largest American content providers have started backing down from their aggressive support of network neutrality, and have begun making agreements with some of the largest networks to put their content directly into the network.
The only big news here is that in the past large American networks, known as Tier-1 network providers, have refused to “peer” with other content providers and smaller networks, preferring to charge an access fee for the bandwidth needed to either deliver the content within the carrier’s network, or to use the carrier as a “transit” network to reach parts of the country and world not easily accessible from their primary data centers.
In the past, public and private Internet exchange points provided by companies such as Equinix (IBX) and Switch and Data (PAIX) have allowed content providers to pass their traffic to international and smaller regional or local networks without having to pay the Tier 1 network “toll.” Having a data center presence near or at carrier hotels such as the Westin Building in Seattle or 60 Hudson in New York allowed content providers to have direct connections to their peers.
The only difference here is that content providers have now started making agreements with the Tier 1 networks, bringing their content directly to the network without the need for private interconnections that may not offer enough bandwidth or capacity to provide sufficient service or end user experience. This is not a bad thing, as long as extra or unreasonable fees are not passed on to the end user – but again the end users will ultimately determine the value of that content, and subsequently the success or failure of that service.
The Future or “Our” Internet
Chairman Genachowski understands the US Government’s responsibility in providing a vision for the future of Internet in our country, and in the world.
“We have an obligation to ensure that the Internet is an enduring engine for U.S. economic growth, and a foundation for democracy in the 21st century. We have an obligation to ensure that the Internet remains a vast landscape of innovation and opportunity.”
If words reflect reality, we have a good opportunity to continue leading the world in Internet innovation and development. Chairman Genachowski gets it. He comes from the commercial world, has grown up with the Internet, and appears to truly have the best interests of the American people and global Internet-connected community in his plan. He is opening up discussion, to all Americans on both sides of the debate, at the new website OpenInternet.Gov.
You can read, and listen to the entire Brookings Institution conference, including a great panel discussion and Q&A session at the OpenInternet.Gov website.
This is your future, and the future of many generations to come. Weigh in, understand the issue, and let your voice be heard, regardless of where you stand on the debate.
John Savageau, Long Beach
