| To: ms.smartest.person who wrote (5125) | 6/22/2007 11:32:26 AM | | From: ms.smartest.person | | | | :•) I, Cringely
June 22, 2007 Pulpit
pbs.org
The Google Connection: Apple and Google are helping each other with the iPhone
I am in Hong Kong this week, my first visit since I was here with a PBS camera crew a decade ago for the handover when the former Royal Crown Colony was given back to China. I remember the surreal experience of watching Prince Charles sail away that evening on the Britannia then turning to find Boy George standing next to me. Not nearly as bizarre but even more disturbing was my experience this morning firing up Google Docs to write this column and finding the entire user interface in Chinese! A Google server somewhere detected my presence in China and very helpfully provided me the Chinese version of the networked application. I'm sure it is a simple matter of resetting preferences, but how? I can't understand a damned thing. Or is this a feature?
The notebook computer I am using is both borrowed and brand-new so it doesn't have any of my favorite software, hence my overconfident reliance on Google Docs. Fortunately it was a simple matter to download demo versions of the apps I normally use and I am up and running long enough to get through this trip.
This kind of cross-cultural experience is exactly what lies in store for all of us as we come to rely more and more on server-based applications. They usually work fine, then take a trip to China and....
Which brings us back to last week's column about Apple's decision to release Safari for Windows and how that is at least in part related to the huge sucking sound of Apple removing (or hoping to remove) money from the treasury of AT&T, Apple's U.S. partner on the new iPhone, which is scheduled to ship on June 29th. Remember I described Safari for Windows as a key component for integrating Apple's networked applications, many of which will be tied into the iPhone.
I've written about the iPhone before. It's a stellar piece of engineering, of course, and nearly as good as Apple claims. There will be early problems, of course, many of them probably related to Apple and AT&T's decision to use the mobile carrier's EDGE network (G2.5) rather than its much faster G3 service. Why hobble with lousy bandwidth a $500 cell phone?
Because lousy bandwidth is being viewed inside Apple as the very reason for the iPhone's probable success.
Huh?
Safari for Windows is a mystery only because it is a product without an associated revenue stream. Like Microsoft Internet Explorer, Firefox, Opera, and nearly every other web browser, Safari is free, so why would Apple, a minor player in the world of Windows software, -- even bother to do a version for Windows? Last week's column (it is among this week's links) goes a ways toward explaining that, but it turns out there is much, much more.
Safari for Windows is part of a PLATFORM in the same sense that iTunes is part of the iPod platform or vice versa. In this case the platform in question is the iPhone and an as-yet unmentioned partner in that platform is Google.
The iPhone absolutely needs AJAX applications for the phone to be a success on AT&T's EDGE network. By pushing more functional logic into the browser, the bandwidth consumed per http round-trip is significantly reduced, making the phone apps faster and helping to justify that big price tag. The problem with this is that AJAX apps don't always work the same (or at all) on every browser. The iPhone has real browser support, which is good, but remember AJAX is based on JavaScript, which in this case is not so good. JavaScript isn't statically typed and each browser has its own version of JavaScript. Developers are typically forced to hand-code different versions of their AJAX apps for different browsers. With the AJAX economy dictating that browsers with big market share like IE and Firefox get most of the effort, that leaves Safari as a second-class browser and, potentially, a liability for the iPhone.
Whaddayado? Introduce a Windows version of Safari, get a million people to download it in the first week, and scare developers into moving Safari customization higher on their AJAX priority list.
Where Google comes into this story is with the Google Web Toolkit (GWT), an open source compiler that compiles Java source code into optimized browser-specific JavaScript code. GWT makes writing AJAX apps like writing regular apps in the sense that developers can use many of the tools they are used to. And GWT adds the advantage that the GWT compiler handles all the problems of working with specific browsers.
Now imagine you are the developer of an AJAX application and you suddenly have an urgent need to support Safari for Windows. The easiest way to accomplish that is through GWT.
What this means for Apple is better and broader iPhone support. What it means for Google is the chance to become the dominant player in Web application development. This is not to say that GWT wasn't already doing fine on its own, but with the added power of Steve Jobs' Reality Distortion Field, it can't help but succeed.
In a very broad sense this is good, too. It is good for the iPhone, which will get a far broader base of applications it can support, and it is good for Google. And in the sense that what's good for Google is good for the Web, it will help all of us.
Or maybe that's the Reality Distortion Field talking.
Apple and AT&T's decision to deliberately use the EDGE network makes more sense now in part as a way to justify that big iPhone price tag, but there is another way in which Apple deliberately chose to hobble the iPhone, at least for now. That's, ironically, through a decision involving the vaunted iPhone user interface.
Remember that a key component of iPhone marketing is that the device will run a version of OS X, making it more computer than phone. When the iPhone finally ships and some techies have voided their warranties and torn the thing apart, they'll probably find it uses a processor running at a gigahertz or more -- by far the fastest processor ever put in a mobile phone -- a processor more powerful than that in my Mom's PC. With all that power locked inside, of course some users will want to imagine their iPhone AS their PC, which Apple -- at least for now -- would rather not enable because it might hurt Macintosh sales. So they've hobbled the iPhone with essentially the same crappy text entry capability as on any other phone.
You can do a lot on an iPhone, but writing the Great American Novel is probably not on the list.
But it could have been.
There is a text-input technology called ForWord Input that could be easily used on the iPhone to allow users with almost no training to input text with their index finger at 50 words per minute, which I have to admit is faster than I can type on a QWERTY keyboard. ForWord Input uses a finger, not a stylus (nothing to lose), is patented, and comes from developers who already have other applications running in 500 MILLION mobile phones.
If I could type 50 words per minute on my iPhone, I wouldn't need a computer, which defines both the opportunity and the problem facing Apple. They are aware of ForWord Input. Maybe we'll see it in a future iPhone software upgrade. |
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| From: ms.smartest.person | 6/22/2007 1:42:24 PM | | | | | | Report Rates Hospitals on Their Heart Treatment
By GARDINER HARRIS
June 22, 2007
nytimes.com
WASHINGTON, June 21 — The federal government has gingerly stepped back into rating the care delivered by the nation’s hospitals, releasing for the first time in nearly two decades a list of hospitals where heart patients are most likely to die.
Officials at the 41 hospitals on the list, which represent about 1 percent of hospitals nationally, said either that they were shocked by the numbers or refused to comment at all.
“We were stunned when this issue was raised with us,” said Dr. Brian D’Arcy, chief medical officer of the Catholic Health System of Western New York. Kenmore Mercy Hospital near Buffalo, which is part of that system, was on the list.
“We believe it’s a statistical anomaly related to hospice-type patients,” Dr. D’Arcy said.
The hospital reviewed the care it provided to each patient who died during the government’s review period, he said, and decided that the care was appropriate.
Although federal officials had released the data to hospitals weeks ago, some hospital officials seemed caught off guard by the government announcement. Dr. Robert Schott, a cardiologist who is director of medical affairs for the Sutter Medical Center in Sacramento, said he became aware of the federal designation only on Thursday.
“We take the data very seriously, and I don’t know why we’re outside of the normal range,” Dr. Schott said.
The report, based on a study of about 5,000 hospitals, also identified 52 where patients died far less often than the national average. Among those hospitals is NewYork-Presbyterian Hospital.
“I think we just try very hard,” said Dr. Herbert Pardes, NewYork-Presbyterian’s president and chief executive.
The report was released by the Department of Health and Human Services after a yearlong study. It is part of a broad push by federal health-care officials to begin demanding accountability from hospitals for the quality of the care they provide.
For the Bush administration, the push is an essential part of keeping much of the American health-care system in private hands and giving consumers information about how they perform.
Health care often seems to operate by a unique set of economic rules that result in huge inefficiencies. One reason for this is that patients have little ability to choose doctors or hospitals based upon an accurate assessment of the quality and price of the care provided. A recent survey of Pennsylvania hospitals, for instance, found that high costs do not correlate with high-quality care.
“This is a glimpse into the future,” said Michael O. Leavitt, the secretary of Health and Human Services. “For most of its history, Medicare has been paying for services but not for results.”
After a request for such data more than two decades ago from The New York Times, the government published hospital mortality statistics in the 1980s. But the data were widely criticized as unfair, because government officials did little to adjust for the relative health of the patients being counted. Time and again, the hospitals found with the worst scores were those that treated the poorest and sickest patients.
As a result of such criticism, the Clinton administration stopped releasing the statistics.
But business groups have been increasingly pushing the government to provide data to allow them to demand better care. So the Bush administration gathered some top health researchers to come up with a way to provide fairer numbers.
Dr. Harlan Krumholz, a professor of medicine at Yale University, said he and others had joined the effort by the Centers for Medicare and Medicaid Services “to prove to C.M.S. that they couldn’t do this.”
But the more they studied the issue, the more the researchers decided that they could use sophisticated statistical analysis to adjust for the relative health and medical histories of patients admitted to every hospital, Dr. Krumholz said.
Richard Umbdenstock, president of the American Hospital Association, said hospital trade associations had joined the effort “because we believe that patients should have the information they need to make choices.”
Peter V. Lee, chief executive of the Pacific Business Group on Health, said the hospital associations regarded the effort warily and and noted that consumers would learn little about most hospitals from the report.
A list of the hospitals can be found at www.hospitalcompare.hhs.gov.
“Without showing true differentiation among most hospitals, we aren’t serving consumers, purchasers or even the hospitals themselves,” Mr. Lee said.
At a news conference, government officials acknowledged that the report was far from perfect. Mr. Leavitt said the government had hoped to come out with a report that he likened to a Formula One race car.
“But what we’re really developing today is a go-cart,” he said. “It will get nothing but better as time goes on.”
The rankings measured hospitals only on how well they handled patients suffering from heart attacks or heart failure. Next year, the government will add pneumonia. And officials said they would probably begin to show increasing differentiation among the vast majority of hospitals now ranked as average.
Dr. Steven Nissen, chairman of the department of cardiovascular medicine at the Cleveland Clinic, said hospitals at the bottom of the government’s rankings “need to look at their systems, processes and education and find out how to get better.”
“If that’s what comes out of all this,” Dr. Nissen said, “that’s a huge benefit.”
But Dr. Michael A. Weber, a professor of medicine in the cardiology division at the State University of New York Downstate College of Medicine, said the rankings might needlessly scare some patients.
“I’m a bit concerned that people might not go to the appropriate hospital and to one farther away and arrive too late to be adequately helped,” Dr. Weber said.
Copyright 2007 The New York Times Company |
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| To: ms.smartest.person who wrote (5127) | 6/22/2007 1:44:10 PM | | From: ms.smartest.person | | | | Hospital Death Rates - lowest & highest mortality rates
June 21, 2007
nytimes.com
The following are the hospitals with the lowest and highest mortality rates for patients treated for heart attacks or heart failure, according to an analysis of about 5,000 hospitals by the Department of Health and Human Services.
Hospitals With the Lowest Mortality Rates
California
Glendale Memorial Hospital and Health Center
Olympia Medical Center, Los Angeles
Connecticut
Hartford Hospital
St. Vincent’s Medical Center, Bridgeport
Delaware
Medical Center of Delaware, Wilmington
Florida
Aventura Hospital and Medical Center
Bay Medical Center, Panama City
Mercy Hospital, Miami
Mount Sinai Medical Center, Miami Beach
Illinois
Loyola University Medical Center, Maywood
Lutheran General Hospital, Park Ridge
Northwestern Memorial Hospital, Chicago
Indiana
Community Hospital, Munster
Methodist Hospitals Northlake, Gary
St. Catherine Hospital, East Chicago
St. Vincent Heart Center of Indiana
Louisiana
Willis Knighton Medical Center, Shreveport
Maine
Maine Medical Center, Portland
Maryland
Good Samaritan Hospital, Baltimore
St. Agnes Hospital, Baltimore
Suburban Hospital Association, Bethesda
Massachusetts
Beth Israel Deaconess Medical Center, Boston
Brigham and Women’s Hospital, Boston
Cape Cod Hospital, Hyannis
Southcoast Hospital Group, Fall River
Michigan
Genesys Regional Medical Center, Flint
Harper University Hospital, Detroit
McLaren Regional Medical Center, Flint
Providence Hospital, Southfield
Sinai-Grace Hospital, Detroit
William Beaumont Hospital-Royal Oak
Minnesota
Abbott-Northwestern Hospital, Minneapolis
HealthEast St. John’s Hospital, Maplewood
Missouri
Barnes-Jewish Hospital, St. Louis
Liberty Hospital
New Jersey
Bayonne Medical Center
Hackensack University Medical
New York
Beth Israel Medical Center, New York
Maimonides Medical Center, Brooklyn
New York-Presbyterian Hospital
White Plains Hospital Medical Center
North Carolina
Rex Hospital, Raleigh
Ohio
Hillcrest Hospital, Mayfield Heights
Marymount Hospital, Garfield Heights
Miami Valley Hospital, Dayton
Southwest General Health Center, Middleburg Heights
Trumbull Memorial Hospital, Warren
Pennsylvania
Forbes Regional Hospital, Monroeville
South Dakota
Heart Hospital of South Dakota, Sioux Falls
Texas
Memorial Hermann Southwest Hospital, Houston
Washington
Evergreen Hospital Medical Center, Kirkland
Wisconsin
St. Luke’s Medical Center, Milwaukee
Hospitals With the Highest Mortality Rates
Alabama
Jackson Hospital and Clinic, Montgomery
Providence Hospital, Mobile
Arizona
Banner Thunderbird Medical Center, Glendale
Kingman Regional Medical Center
Yuma Regional Medical Center
Arkansas
Conway Regional Medical Center
Sparks Regional Medical Center, Fort Smith
California
Corona Regional Medical Center
Lodi Memorial Hospital
Mercy Medical Center-Redding
St. Joseph’s Medical Center of Stockton
Sutter General Hospital, Sacramento
Tri-City Medical Center-Oceanside
Florida
Manatee Memorial Hospital, Bradenton
Georgia
Medical Center of Central Georgia, Macon
Illinois
Bromenn Healthcare, Normal
EHS Christ Hospital and Medical Center, Oak Lawn
Louisiana
Christus St. Francis Cabrini Hospital, Alexandria
Michigan
Port Huron Hospital
Mississippi
Forrest General Hospital, Hattiesburg
Nebraska
Faith Regional Health Services, Norfolk
New York
Catholic Medical Center of Brooklyn/Queens, Jamaica
Kenmore Mercy Hospital
Massena Memorial Hospital
North Shore University Hospital at Plainview
Samaritan Hospital-Troy
Ohio
Southern Ohio Medical Center, Portsmouth
Oklahoma
Claremore Regional Hospital
Oregon
Providence St. Vincent Medical Center, Portland
Sacred Heart Medical Center, Eugene
Pennsylvania
Gnaden Huetten Memorial Hospital, Lehighton
Tennessee
Athens Regional Medical Center
Baptist Memorial Hospital-Memphis
Hardin County General Hospital, Savannah
Texas
Baylor All Saints Medical Center, Fort Worth
Christus St. Michael Health Care Center, Texarkana
Hendrick Medical Center, Abilene
Huguley Health System, Fort Worth
Virginia
Danville Regional Medical Center
Washington
Olympic Medical Center, Port Angeles
Wisconsin
St. Mary’s Hospital Medical Center-Green Bay |
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| From: ms.smartest.person | 6/22/2007 1:59:54 PM | | | | | | ▲ AT&T offers $10 DSL, but tells no one about it
By Steve Ragan
Jun 20, 2007, 16:08 GMT
tech.monstersandcritics.com
AT&T has complied with a Federal Communications Commission (FCC) ruling and launched a new DSL plan that costs just $10. While the low cost is interesting, the interesting fact is that they launched it without any sort of announcement, or fanfare. The reasons could be any number of things, but the one that is being pointed out the most is that they were forced to create the service and offer the service, but no one said they had to market it.
The DSL plan was launched Saturday. AT&T created the plan, in accordance to concessions made to the FCC in order to get an $86 billion buyout approved when they wanted to acquire Bell South in 2006. The $10 plan is available to consumers in the AT&T service area, which includes Bell South customers and a total of twenty-two states. The requirements are normal, local phone service and a one-year contract.
Several reports including one by the Associated Press pointed out that the news release made last Friday, by AT&T about new DSL offerings excluded mention of the low cost plan. Looking for the plan on the AT&T website reveals that it is almost hidden unless you look at the Term Contract Plans page. A spokesperson for AT&T told the AP that the $10 plan is offered to customers who go through the application process, but made no mention as to why the plan appears to be hidden online or why it was not announced.
Offering speeds of 768kbps down and 128kbps up, the elusive plan matches one that AT&T does display online and sells it for $19.00 per month. The $19.99 plan covers the former Bell South coverage area and in the other thirteen states, it retails for $14.99. The thirteen state coverage areas were covered by AT&T before they acquired Bell South.
AT&T is still required by the FCC to launch a “naked DSL” plan and has six months to get that off the ground. Naked DSL is a service option for DSL that would not require local phone service. Consumer rights groups pushed for the type of service because VoIP calls using the DSL lines are cheaper in some cases than local tolls for calling. The issue is the standard 768kbps download speed offered by DSL, which to some consumers is too slow for any form of decent QoS (Quality of Service) regarding VoIP usage.
© Copyright 2006,2007 by monstersandcritics.com. |
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| To: ms.smartest.person who wrote (5126) | 7/20/2007 3:43:20 PM | | From: ms.smartest.person | | | | :•) I, Cringely
July 20, 2007 Pulpit
pbs.org
When Elephants Dance: Get ready (finally) for faster Internet speeds at lower prices
By Robert X. Cringely
bob@cringely.com External Link
My friend Ira, who lives in Yokohama, Japan, has 100-megabit-per-second fiber-optic Internet service in his home. This costs Ira less than $30 per month. What the heck is up with that? Ten years ago, the United States had the fastest and cheapest residential Internet service in the world. Today U.S. residential Internet service, especially broadband, is among the slowest and most expensive. I'll explain next week how I believe we came to be in this bandwidth mess, but this week I get to predict that the situation may (finally) be changing. Get ready for a substantially faster and somewhat cheaper Internet.
While your broadband service may be labeled as faster than it used to be, there has been very little that is really new happening in Layer 2 Internet services. Cellular G3 data has been dormant. For all the talk of G4, G2.5 is still the standard. Cable modems with Data Over Cable Service Interface Specifications version 2 (DOCSIS-2) have been standard for years. DSL has s-l-o-w-l-y moved to 6mbps/768kbps IF you are lucky to live close to the DSLAM. For businesses the big technology has been Multi Protocol Label Switching (MPLS) over T-1 service, which is not really a Layer 2 improvement at all. Metro Ethernet is coming along but too slowly for most. And Internet rates for businesses are still around $500 per month for a 1.5 megabit-per-second T-1, which is lousy compared to many parts of the world, some of them supposedly a lot less developed than the U.S.
Here are some clues to what has just started happening to change the Internet service status quo.
Alltel, a national mobile phone company, was acquired by Silverlake and TPG Capital, two private equity funds. Avaya, a maker of IP telephony systems for business, was also acquired by the same Silverlake and TPG Capital. T-Mobile now offers in the U.S. a pair of mobile phones from different vendors that will allow free calls from WiFi hotspots. Apple's iPhone has WiFi support. DOCSIS-3 cable modems have been demonstrated operating at 150 mbps with deployment to begin next year. Verizon is rolling out fiber service to homes and businesses. For customers who can't get fiber, Verizon recently increased DSL speeds with no price change. Sprint is becoming the dominant wireless Internet service for businesses through aggressive pricing, which is especially hurting AT&T (formerly Cingular). And AT&T has taken 30 percent of MCI's (now Verizon's) business customers through aggressive T-1 pricing. In short, everyone is poaching from everyone else in the business market, which points to a looming price war for business Internet service starting this fall.
Here is the first shot -- Verizon's FiOS Business Internet prices to be rolled out this fall in the northeast U.S., bypassing Metro Ethernet, Frame Relay, and point-to-point T-1's with asymmetrical fiber service:
Dynamic 5M/2M $ 40/mo.
Dynamic 10M/2M $ 40/mo.
Dynamic 15M/2M $ 60/mo.
Dynamic 20M/5M $ 60/mo.
Static 15M/2M $ 100/mo.
Static 20M/5M $ 100/mo.
Dynamic 5M/5M $ 170/mo.
Static 5M/5M $ 210/mo.
Dynamic 30M/5M $ 350/mo.
Static 30M/5M $ 390/mo.
Dynamic 35M/10M $ 170/mo.
Static 35M/10M $ 210/mo.
Dynamic 50M/10M $ 350/mo.
Static 50M/10M $ 390/mo.
So business Internet prices will drop in the northeast, where Verizon is king, but the impact will be felt nationally because Verizon will have established pricing levels that other competitors will have to meet.
Now let's get back to Silverlake and TPG Capital. Their Alltel mobile phone network will provide VoIP to Avaya PBX's, effectively creating for businesses (at first) a PSTN bypass. Then the same people will provide Vonage-type phone service over local broadband using Avaya PBX's, creating yet another PSTN bypass. WiFi will become standard for the cellphone industry after years of being blocked by cellular providers. Verizon fiber pricing will force AT&T and others to lower prices in the northeast, but AT&T can't have two national pricing plans so costs will fall everywhere. Part of this will be driven by Comcast's pending roll out of DOCSIS-3 cable modem services. AT&T's response will be to try and lock in clients for multiple years BEFORE the DOCSIS-3 deployment, causing even more downward pressure on prices. By now we're talking about not just business prices but also residential.
At this point expect the state utility commissions to push for rate normalization between fiber and non-fiber territories, meaning more downward pressure.
Business model changes involve so-called "triple play" services where ISPs hope to make money from providing not just Internet service, but also telephone and television. The cable TV companies want to steal from the telcos basic phone service while the telcos want to steal television service from the cable companies. Since either possibility requires advanced data services and more bandwidth, users benefit.
U.S. telcos, notably AT&T and Verizon, are aggressively building out their fiber plants, though AT&T is taking its fiber only as far as the curb while Verizon is taking fiber directly into the home. This ostensibly limits AT&T to XDSL speed limits, though the company can use channel bonding (more than one pair of copper wires per service) to increase speeds if forced to do so by competition. Verizon is rolling out residential fiber service from 30-50 megabits per second but its equipment can jump to 100 megabits per second if needed without requiring another truck roll.
An important secondary motivation for this fiber roll-out is that telcos are not required to share such facilities with competitors as they have been required to share copper infrastructure under the Telecommunications Act of 1996. So while there may be competition in the neighborhood from cable modems, once the fiber is in and the copper is out the telcos need never again fear competition from Competitive Local Exchange Carriers (CLECs).
While the number of U.S. residential broadband users is continuing to increase, the rate of that increase is slowing according to several surveys by the Pew Internet & American Life Project. Extrapolating these numbers suggests that ultimate broadband penetration will be comparable to cable TV or around 85 percent absent some total coverage solution like BPL. This slowing of growth may be inspiration for the growing telco vs. cable battle over triple play digital services, with the idea that some telephone users (where market penetration is already 97+ percent) will be induced to buy broadband service to lower their telephone costs.
Who is the big winner here? Well I'll count myself a winner if my Internet pricing comes down a bit (I pay $168 for 8/1 cable service with five static IPs) but the REAL winner is Cisco Systems, whose largest market is service providers. With Comcast and Verizon pushing AT&T toward offering new technologies at lower prices, EVERYONE is going to need a new router. |
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| To: ms.smartest.person who wrote (5130) | 7/20/2007 4:18:38 PM | | From: ms.smartest.person | | | | Alltel's private party
By Kevin Fitchard
Jul 9, 2007 12:00 AM
telephonyonline.com
Alltel is going private for a whopping $27.5 billion, the very first major wireless service provider in the U.S. to be ensnared in the private equity deals sweeping Wall Street. There may be more on the horizon.
According to analysts, Alltel may just be the first among Tier 2 regional providers-and possibly even nationwide operators — to become a target for leveraged buyouts. The huge cashflow of many operators presents an attractive target to private equity firms like the Blackstone Group and Providence Equity Partners that bid on Alltel, but ultimately lost out to the private equity arm of Goldman Sachs and TPG Capital.
More deals could be in the offing, but some investors are wondering what Alltel can now do as a private company that it couldn't do as a public one.
Goldman Sachs and TPG agreed to pay $71.50 per share for the country's fifth-largest wireless operator, which has a subscriber base that just a few years ago would have ranked among the Tier 1 operators. Only $4.6 billion of the $27.8 billion price is in cash from TPG. The rest will come from $15.5 billion in loans and $7.7 billion in junk bonds, increasing the company's debt exponentially.
Alltel isn't the first telecom company to see its public equity swapped for debt. LogicaCMG sold its telecom group to private investors in February, and shortly after Alltel's decision, Avaya struck a deal with TPG and Silver Lake. But those are both vendors. Alltel's position as a major wireless provider makes it unique.
Leveraged buyouts are short-term deals, said Ranjan Mishra, director for strategic consulting firm Oliver Wyman, formerly Mercer Management Consulting. A private equity firm takes a company private using its access to ready cash and its shelter from the quarterly expectations of the stock market to overhaul the company, he said.
That overhaul can take place in several ways: The new owners may seek to cut costs and restructure the company operationally or it may invest new capital into the company, allowing it to expand and grow without causing a shareholder revolt.
Ultimately the goal would be to increase the intrinsic value of the company so at some future point it can be sold or spun off at a profit, Mishra said. In the case of Alltel, Goldman Sachs and TPG's strategy isn't clear. Alltel isn't known for being a mismanaged company, Mishra said, but then again, the wireless industry hasn't been subjected to the discipline that many other mature industries have been forced to adopt. Wireless is coming off its boom years, which led to mass adoption of cellular communications since the late '90s. The U.S. hasn't reached the high penetration levels of some of its European and Asian counterparts, but more than two-thirds of the U.S. population uses a cell phone. Still, the days of growth at all costs are over.
“The wireless industry is not known for producing the most efficiently run companies,” Mishra said. “We're past the growth stage. There's still some margin to grow out there, but the focus is shifting.”
The new owners could be looking to streamline Alltel, maximizing its efficiency and profits and returning a meaner, leaner company to the market, Mishra said. The other option is to invest more money into Alltel and allow it to grow. This scenario can be an optimal situation for a company looking to expand. As a publicly traded company, Alltel answered to many masters, and as evidenced by Sprint's recent trouble with its investors, those master's aren't always keen on multi-billion-dollar capital outlays. As a private company, though, Mishra said, the ownership and management share the same vision as Alltel, allowing it to incur short-term losses for the sake of long-term growth.
“This opens up the possibilities for Alltel,” Mishra said. “Alltel is accustomed to being rewarded by the ‘street quarter’ compared to the previous year's quarter for growing revenues and earnings and not capital spending.”
If Alltel's private investor's choose to grow the company, the question will be: Where will they expand? TPG and Goldman Sachs may have national ambitions. Before the mergers and acquisitions of the last two years, the market supported six nationwide carriers. Alltel may be thinking the market could easily support a fifth today, Mishra said. The company could begin expanding beyond its core rural markets and into larger cities, taking a cue from other Tier 2 carriers such as Leap Wireless, MetroPCS and U.S. Cellular, which have either been expanding to top-tier markets or targeted them originally. To do so would require both massive outlays of cash for infrastructure as well as new spectrum acquisition. So far, Alltel hasn't shown much interest in this type of expansion. It didn't participate in the Advanced Wireless Services auction last year, but it could opt to bid in the upcoming 700 MHz auction.
A more likely scenario would be for the company to once again tap into the skills of its investors, said John Celentano, president of Skyline Marketing Group. The private equity groups are deal-makers, and there are plenty of deals out there left to be made. There's no rule against those deals being made by TPG and Goldman Sachs instead of another equity group. A leveraged buyout of U.S. Cellular and subsequent merger with Alltel would greatly expand Alltel's footprint as well as move the Alltel brand into a top-five market like Chicago. Or, a similar deal with MetroPCS would put Alltel on track to move into some of the largest metropolitan markets in the U.S.
“It would surprise me to see that, after this deal closes, they start buying up other companies,” Celentano said. To him, expansion makes much more sense than reorganization if TPG and Goldman Sachs are planning to increase the value of the company.
Although many of the leveraged buyouts in other industries are focused on cost cutting, there is only so much cost cutting a wireless operator can do to remain competitive. Alltel's capital expenditures aren't as high as its Tier 1 counterparts, but Celentano estimates it will spend $1.2 billion this year to maintain its network and build out in current markets. Lopping that capex budget off at the feet simply isn't an option.
“Wireless operators have to spend some hefty dollars just to stay in business,” Celentano said. “These companies don't have room to scale back. I'm not privy to the ultimate plan for Alltel, but if it expects to keep its momentum, it has to either maintain its spending or grow it.”
Regardless of which direction private ownership takes Alltel, that the deal was made at all is a good sign for the wireless industry. The U.S. wireless market may be slowing, but private equity's interest in mobile operators shows there are still incremental growth opportunities in the industry.
“The trend will continue,” Mishra said. “There might very well be a dampening of interest if it's decided that some of these deals may have overreached. Turning around a telecom company may be harder than they thought. But unless that happens, expect more of these deals in the future.”
MOBILE CARRIER CAPEX
(in millions of U.S. dollars)>
Carrier Capex 2006 2007 % change
AT&T (Cingular) 7039 5000 11%
Sprint Nextel 5846 7000 9%
Verizon Wireless 6618 6600 8%
T-Mobile USA 3444 3300 27%
Alltel Wireless 1165 1150 22%
Centennial Communications 49 50 0%
Dobson Communications 162 155 7%
Rural Cellular 47 60 -29%
SunCom Wireless 68 65 - 6%
U.S. Cellular 580 600 - 6%
Source: Skyline Marketing Group
MOBILE CARRIER REVENUE
(in millions of U.S. dollars)>
Carrier 2006 2007e
AT&T (Cingular)) 33,756 35,500
Sprint Nextel 31,918 37,000
Verizon Wireless 32,796 38,500
T-Mobile USA 14,511 17,000
Alltel Wireless 7030 8500
Centennial Communications 433 475
Dobson Communications 1202 1290
Rural Cellular] 539 570
SunCom Wireless 755 780
U.S. Cellular 3214 3500
Source: Skyline Marketing Group
|
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| From: ms.smartest.person | 7/21/2007 12:59:06 PM | | | | | | Author sees happy ending without humans
In his new book Alan Weisman imagines the Earth after polluters, proselytizers and the rest of us disappear
JOHN ALLEMANG
From Saturday's Globe and Mail
theglobeandmail.com
July 21, 2007 at 12:00 AM EDT
Somewhere we got the crazy idea that it was all about us. You can even see it in the word we use to describe the world we're bent on ruining: the environment – the stuff that surrounds the mammal with the outsized brain who almost by definition (our definition, of course) is at the centre of things.
We're not the norm, though, whatever we pretend. Our presence has been brief, almost non-existent when measured against the planet's 4.5 billion years. And our long-term prospects are doubtful, even if we take advantage of global warming to resist the next ice age for a few measly millennia while managing to evade the killer asteroids, tectonic jolts and toxic habitats that did in our predecessors.
Still, believing we're at the centre of it all, we find it hard, if not logically impossible, to contemplate a world without us: Some of us deny our special genius for self-destruction, some of us wallow in fear – and some of us persist in thinking that salvation, when and if it comes, will be our achievement as well. Anthropocentric to the last, we can't conceive of a happy ending that doesn't include us as both the agent and the beneficiary, the giver and the taker.
But there could be a different solution, or at least another twist in the plot that would make the Earth's story much less self-serving and predictable. What if, Alan Weisman asks in his startling new book, The World Without Us, we all just disappeared? Annihilation has happened before (think dinosaurs) and it will happen again (probably long before the sun calls it a day). So why not now, while nature still has a chance to reclaim what was hers before we moved in?
Mr. Weisman, an author, radio producer and professor of international journalism at the University of Arizona, has decided to usurp the role that once belonged to deities impatient with the follies of the human race. He instantly eradicates the species with breathtaking detachment, which not only saves us from environmental death throes but also immediately puts the focus back where it belongs: on the awesome powers of nature to reclaim the Earth despite the human detritus of highways, skyscrapers, nuclear reactors and billions of pesky plastic bags.
It's a crafty paradox, and an oddly satisfying way of soothing the anxieties that the save-the-planet crowd necessarily trade in: We can appreciate the wonders of the natural world much more when we're not in the picture.
“The underlying message of the environmental movement,” Mr. Weisman says from his Seattle hotel room, fresh from talking to a group of Colorado Young Democrats who couldn't accept that the manufacturing of plastic bags should be made a criminal offence, “is that if we don't fix this thing, we're all going to die. That scares the hell out of people, unfortunately. They find it depressing and downright scary. If you preach that in a book, they're going to toss it out, turn on the TV, light up a joint – or do anything rather than read this stuff.”
And so the reassuring Mr. Weisman came up with a strategy to take the worry out of environmental catastrophe and shift our attention (for once) away from ourselves. “Let's assume just for fun that we're already gone. Aliens took us to some zoo in Andromeda or Jesus took us to heaven – being nice, he took everyone – or some disease just picked us off and left everything else. So we're all gone, but we get to see what happens next, as all our stuff is dismantled rather efficiently by nature.”
In The World Without Us, he describes in loving detail how human stuff will decompose and decay as nature rushes back in. The New York subway, no longer able to resist Manhattan's 40 buried streams, will be flooded in no time as pumps stop working and the roads above begin to heave, starting the slow, steady process that turns the city into a picturesque ruin populated by raptors in the upper reaches and whatever sea creatures gravitate to the waterlogged high-rent avenues.
Meanwhile, far away from the former centre of things, the world's 441 nuclear reactors are all melting down or burning up once their cooling systems have ceased to function. “An exquisitely machined technological array,” as Mr. Weisman calls these towering creations of the human intellect, quickly devolves into overheated metallic blobs, leaving behind wisps of poisonous radioactivity to damage living things for thousands of years to come.
It is a picture of human insignificance as much as it is a rebalancing of the relationship between once-dominant man and apparently submissive nature. Arrogance is a human characteristic, even a survival skill, but every generation needs a way to temper that aggression so that it doesn't become self-destructive.
Medieval potentates were once advised to keep a memento mori figurine by their side – a stripped-down skull or something equally morbid – to remind them of what came next. Remembering that you would die, and come face to face with a divine judge, was supposed to provide perspective on this life and its transient values.
The prospect of the Last Judgment is less compelling now. As fewer people fit their lives to God's judgment, some other kind of warning has to be devised to remind more earthbound consciences of where all our human vanities are leading. In getting rid of humans, Mr. Weisman says, his real aim is to make people think “how wonderful nature could be if only we didn't mess it up so much, and is there some way we could still be a part of it.”
But for now, we're gone, leaving behind just the traces of our dubious legacy. Mr. Weisman is a connoisseur of the ironies that human accomplishments provide, and his book is as much about the souvenirs of our brief stay that will linger on after we're gone.
For example, plastic products, which have been a part of our lives for just 50 years, are likely to outlive almost every other human creation – even as they're broken down into powder-like particles that will find their way into the gullets and genetic material of every living creature. And even though plastics “haven't been around long enough for us to know how long they'll last or what happens to them,” they're treated so casually that exfoliant creams and abrasive toothpastes contain grains of plastics intended to go down the drain and into the mouths of waiting sea creatures.
The elements of environmental doom and gloom are here, in other words, and rightly so. But without humans and their limited world view to concern him, Mr. Weisman allows himself to see the bigger picture, to find the kind of consolation nature can provide given enough time and opportunity. Microbes evolved to feed on trees and so, too, will they learn to break down plastic.
“They're very smart and very patient,” Mr. Weisman says admiringly. “They were around before everything else and they'll be there when everything else is gone – they live in a different time scale.”
Nature is adaptable over the long haul, provided there is a long haul: Ninety-five per cent of the Earth's living things mysteriously disappeared 250 million years ago, leaving behind not much more than snails and clams. “It was actually a thoroughly good idea,” paleobiologist Doug Erwin tells Mr. Weisman, taking the big-picture view that, after 400 million years of the Paleozoic era, it was time for something new.
Out of this low-impact emptiness came dinosaurs, which, after 150 million years and a timely asteroid, gave way to mammals. There's something miraculous going on here, once we forget about our self-declared primacy for a moment and start to appreciate the much, much bigger picture.
“The wonderful thing about being human,” Mr. Weisman says, letting us back into the frame for a moment, “is that we're capable simultaneously of sustaining concepts which seem to be in contradiction. On the one hand, I'm scared by what's going on in the environment, but on the other hand I'm comforted by understanding how resilient life is – we've been through worse things before, we'll get through this one too.
“I don't like the idea of a world covered with plastics and I'm hugely distressed that this took only 50 years to happen. But I'm also comforted by the fact that it hasn't been all that long and maybe if we started un-creating this mess now, we could turn things around.”
Though he didn't set out to write a feel-good book, Mr. Weisman can't help but cheer us up with nature's indomitability, which persists in the least likely places. One of his most oddly optimistic passages depicts the teeming wildlife reserve better known as the Demilitarized Zone between North and South Korea.
Where humans can't go – a booby-trapped dead zone designed to separate two enemies and prevent deadly confrontations – the beauty of life has returned in abundance, even if much of the poetic contemplation is carried out through gun sights and a sentry's binoculars.
“It's hard to find a metaphor that will top that one,” Mr. Weisman says. “You have two hostile armies facing down each other, and then suddenly these beautiful white birds, as pure as innocence itself, alight on the ground, don't touch any land mines and just sit there being fabulous.”
As an author whose point of departure is the eradication of Homo sapiens, Mr. Weisman might be taken for a misanthrope. But he insists he's on our side – some of his best friends are humans, after all, and even if he's inclined to call our civilization “an interregnum in the ice cycle,” he still marvels at built-to-last bridges and the works of Beethoven with the same fervour he brings to DMZ birdlife.
“I think we're worth saving. But right now we're just wreaking too much havoc that affects everything else.”
And that is his point in taking us out of the mix, to show what the world could look like if we weren't determined to get in the way with quite so much blind enthusiasm.
“Nature is a beautiful system,” he says, happy to be accused of idealizing his subject. “It works in such a nice balance, constantly converting mass to energy and back again in this wonderfully slow pageant.”
Catastrophes happen, crashing in from outer space or welling up from the centre of the Earth or just driving SUVs en masse along the freeway. “But when the dust settles, life is still there – sometimes just a few shards of it, but enough to regroup and do it all over again even more interestingly this time.”
And maybe that's the hardest thing for Homo sapiens to contemplate – not that our time here has been brief and our influence increasingly malign, but that in the greater scheme of things, by the enduring standards of the natural world, we're just not very interesting.
John Allemang is a Globe and Mail feature writer and frequent Focus contributor. |
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| From: ms.smartest.person | 8/19/2007 8:42:14 PM | | | | | | Calling made easy, dial JAJAH
JAJAH believes that phones are the best way to make calls and integrates them with the Internet to provide a unique telephony solution. By Neeraj Gandhi
Imagine talking to your relatives in the USA or UK and not paying for the conversation. Sounds pretty good does it not. The best part is that you can do this sitting at home. All you need is a phone connection. Err? No. That’s right, only a phone connection. No computer, no broadband, and you can speak to anybody, anywhere, anytime, courtesy JAJAH.
JAJAH provides free or low cost global calling from mobile phones or landlines without actually having to sit in front of the computer, downloading complex software or even having a broadband connection. The Internet is required only to initiate the call.
“The Internet has touched us all. It has changed the way we do everyday things. It has changed the way we stay informed, the way we shop for the products that we want, even the way that we find and listen to music. In the same way, JAJAH will change the way that we all use the telephone,” says Roman Scharf, CEO and co-founder, JAJAH.
Laying the foundation
Headquartered in Mountain View, California, JAJAH was founded by Daniel Mattes and Roman Scharf with the vision of bringing to smarter and cheaper telephony solutions to the masses. It is unique in the sense that unlike other VoIP providers, JAJAH requires no headsets and offers cheap international calls.
It started its operations in March 2006. In just one year it boasts of a huge base of more than two million customers in 55 countries. At present the company has users in USA, UK, Canada, China, Singapore, Hong Kong, Thailand, Argentina, Australia, France, Germany, Italy, Japan, Malaysia, Venezuela and many more. Europe, the United States and Asia are its biggest markets.
Ranked among the Red Herring top 100, placed above Microsoft and Yahoo, the company has offices in Munich (Germany), Vienna (Austria) and Luxembourg to manage its European operations, and a Research & Development center in Ra’anana, Israel. With just over 70 employees, JAJAH works to bring vastly improved telephony solutions to the world.
“JAJAH is a different type of phone company dedicated to providing customers with phone calls at a better price. It offers an innovative way of making cheap calls without headphones, microphones or software downloads or a broadband connection,” says Scharf.
What is it that makes the company different from other VoIP service providers? “Unlike other companies that are trying to replace the phone with the computer, we at JAJAH believe that phones are great just way they are. Phones work. People are not interested in headsets, downloads or hotspots. They simply want to make a call and we completely agree,” Scharf adds.
How it works
JAJAH uses the Internet in order to connect two standard phones (landline or mobile), thus implementing both the advantage of the Internet as a low-cost or free service and the comfort of using a regular telephone device. In the process two local regular PSTN calls, anywhere in the world, (last mile) are bridged by a high bandwidth Internet connection.
The user has to visit www.jajah.com where he can simply enter his number and the number that he wishes to call. JAJAH will then call back both parties, over the phone line. No headsets, no phone plans, or calling cards are required. All this is available at a minimal rate.
Throughout the call, it is not required of the caller to stay connected to the Internet. Once the number is entered on the Web site and the call button is clicked, the call is transferred by the Jajah VoIP controller onto the mobile or land line number from where the caller desires to make the call.
Services
JAJAH has a plethora of telephony services on its platter. Here’s a look at what the company has to offer to its users in India.
* Conference Calls: JAJAH conference calling allows the user to schedule and initiate cheap conference calls with friends and colleagues in an easy-to-use online set up. This conference call service is unique in the sense that no costs at all will arise for the other conference call participants.
* Scheduled Calls: The scheduled call service allows the user to plan the JAJAH calls ahead. With this service, the user can decide at what time and date the service will connect your call. The scheduled call system also allows callers who use the same phone line for an Internet connection and telephone calls to use JAJAH. There is no cost whatsoever for scheduling a call.
* SMS Service: Through this service the user can send SMS to mobile phones around the world. These messages can be sent at a specific date and time (scheduled message) and sent to multiple recipients with one click. A message can be sent to ten recipients in a single go.
JAJAH BETA: Dynamic Buttons
JAJAH buttons is a tool to organize calls, schedule them and also to maintain the privacy of the user.
This service allows the user to select whether to receive calls, transfer them to voice mail, SMS or e-mail as per his convenience. A user can also schedule his calls through these buttons. For instance, incoming calls between 9 and 12 am can be directed to the office phone, between 5 and 8 pm can be routed to the mobile phone or even e-mail or SMS, as the user desires. These buttons can also be pasted as the e-mail signature.
Partners in progress
When JAJAH embarked upon its journey last year, the founders had no idea that it would be successful. In a year’s time, the user base has gone from zero to over two million. “Vodafone has a presence in 20 countries, German Telecom provides services in 16 countries, and JAJAH has a presence in 55 countries across the world. This, in itself, speaks of the popularity of the services that we offer,” says Scharf.
Today the company has some top companies as its partners. The list includes; Microsoft, Intel, AOL, IBM, Apple, Google, eMobile, Mozilla, and Logitech among others.
Targeting India
After making its presence felt in 200 different destinations, in 55 countries across the world, JAJAH is ready to take on the Indian market. Here in India, the company aims at reducing the call rates to and from India. As an introductory offer, from now until August 15, 2007, Indians calling their relatives or friends in the USA or UK will be charged Rs 3.10 per minute, if they route their calls through JAJAH. This is below the standard international calling rates.
“With approximately 200 million telephony subscribers, India presents a huge opportunity for us. And we take great pleasure in providing cheap and better calling services to them. In the future we see India as one of our top five most favored destinations,” says Scharf.
The company has planned a two-phased strategy for India. In the first phase, that begins now, users will be charged a minimal amount when they call abroad or even other JAJAH users back in India. Here’s how it’s going to work. The user will have to visit www.jajah.com where he can simply enter his number and the number he wishes to call. JAJAH will then call back both parties, over the phone line. No headsets, no phone plans, or calling cards are required. This can also be done using a smartphone.
During the second phase that begins in October and by that time the company presumes that it will have a substantial number of users, calling will no longer require the caller to log onto the company’s Web site to enter the numbers. By then the company plans to introduce a system where both domestic and international calls will be connected directly from a landline or a mobile phone. The caller will have to simply dial a number and the call will be routed through the JAJAH VoIP controllers installed in different countries.
That’s not all. It is not only cheaper call rates that the company has in store for India. “Our long term commitment is to make voice free. Once we have generated the desired user base, we will make calls free. A JAJAH user in India would then be able to make calls to other JAJAH users in India and even abroad for free,” says Scharf. In fact the company has offered similar services to users in China, US, UK, South Korea, Japan, Malaysia, Spain and Australia etc.
JAJAH will also bring to India what it calls the Community Benefits Service. The Indian community members will have the opportunity to earn free talking minutes by referring others to the network.
expresscomputeronline.com |
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| To: ms.smartest.person who wrote (5051) | 9/16/2007 1:38:04 PM | | From: ms.smartest.person | | | | :•) i, Cringely - July 27, 2007 Pulpit - Is Google on Crack?:
Eric Schmidt bets the ranch on wireless spectrum
By Robert X. Cringely
bob@cringely.com
pbs.org
This week I was supposed to explain why U.S. broadband prices are so much higher and U.S. broadband speeds are so much lower than in most other developed countries, but then Google made an unexpected reckless move in the wireless bandwidth market and here I am trying to explain it. We'll get back to broadband prices shortly, but for now let's turn to Google, whose stock may very well have already peaked.
What has me all worked up is Google's announcement this week that it intends to bid at least $4.6 billion in the Federal Communication Commission's auction of bandwidth in the 700-MHz band being reclaimed in 2009 from analog television. The auction price can and probably will go a lot higher than that, but $4.6 billion is the reserve price, so Google is saying it will unilaterally make sure the auction is successful and the spectrum is reallocated... IF certain conditions are met.
Google "requested that the Commission should extend to all CMRS-type spectrum licensees clearly delineated, explicitly enforceable, and unwavering obligations to provide (1) open applications, (2) open devices, (3) open wholesale services, and (4) open network access." For those of us who don't regularly hang with the FCC these proposed conditions mean: 1) users should be able to download software from anywhere and use it on their communication devices without restriction; 2) users should be able to use any communication device that meets the technical requirements for connecting to the network no matter who made the device; 3) third-party resellers should be able to buy wholesale bandwidth from auction winners, and; 4) other networks should be able to connect to the 700-MHz network.
These are Internet rules Schmidt is asking for, Internet Engineering Task Force-like rules, that Google wants to apply to this fresh patch of wireless connectivity, turning what would have been yet another mobile phone system into a mobile Internet. The ideas aren't unique to Google and have been pushed for some time by folks including former Netscape CEO Jim Barksdale and former FCC commissioner Reed Hundt. They represent a bold idea that would change forever the way phones are used in the U.S., especially with landline connections in decline.
But this isn't the only proposal for auction rules that will supposedly "open up" the new spectrum. FCC Chairman Kevin Martin has proposed his own rules -- leaked to USA Today and the Wall Street Journal -- rules that would mandate opening up the network to a certain extent to third-party devices, though with limits on which frequencies could be accessed and without most of the other requests made by Google and others. AT&T at first opposed Martin's proposed rules then came around to supporting them, and Verizon appears to have done the same.
This is all the highest of theater. Chairman Martin's proposed auction rules won't actually go very far toward opening up the network. And the opposition then grudging acceptance of first AT&T and then Verizon to Martin's proposal is playacting that has more to do with Google than with the FCC chairman. The major wireless carriers have no desire at all to open up this network or any other. The bogeyman here is Voice over Internet Protocol (VoIP), which is currently restricted from most U.S. mobile networks because, well, nobody can really figure out why. Since most mobile users aren't paying separately for long-distance anyway and most U.S. mobile users can't even make international calls because of high toll fraud, VoIP just burns up minutes and would seem to threaten nobody. Still, the carriers hate and fear VoIP, so they put together this drama of supposed openness in order to make sure that true openness can't happen.
By this time it should be clear that I generally support what Google has proposed and think it is a very good idea for us all. So why, then, does the headline on this column suggest that Google is on crack to have even made such a proposal?
Because they don't know who they are messing with, that's why.
I am 100 percent behind Google's four conditions, but I see very little likelihood that they will be accepted by the full commission. I also see that they have slightly moved the wireless incumbents, who are mean and spiteful companies and WILL HAVE THEIR REVENGE.
I don't think it is clear to a lot of observers just how much Google has at stake in this issue. It goes far beyond the $4.6 billion. Remember that's just the reserve price, and by pledging that amount Google is making sure the auction goes forward at a price that will probably be north of $10 billion. IT IS VERY DOUBTFUL THAT GOOGLE WILL BE THE WINNER OF THAT $10 BILLION AUCTION. The wireless carriers will spend whatever it takes to win, not just because of the prime spectral real estate involved (700 MHz goes through concrete walls like butter), but because they don't want to change operational rules that have been very profitable for them over the years.
You see if Google actually bid and won the 700-MHz auction, they could operate the band exactly as they have proposed the FCC require. They could open the spectrum to devices and networks and services with impunity because winning the auction and paying those big bucks would entitle them to do so. It is only because Google doesn't expect to win, or possibly even to bid, that they are trying to force rules on the eventual winners, the mobile telcos.
I'm all for tilting at windmills -- heck I do it enough myself -- but Google has a lot at risk here and I think they are being foolish, even stupid.
Look who Google is up against -- all the largest Internet service providers in the U.S. Google will not win this even if they win the auction, because the telcos and cable companies are far more skilled and cunning when it comes to lobbying and controlling politicians than Google can ever hope to be. The telcos have spent more than a century at this game and Google hasn't even been in it for a decade. And Google's pockets are no deeper than those of the other potential bidders.
Frankly, I see Google heading for a big loss on this one.
And what they have to lose is more than you might guess. Google is risking its cash crop, leadership in web search.
Bill Gates likes to talk about how fragile is Microsoft's supposed monopoly and how it could disappear in a very short period of time. Well Microsoft is a Pyramid of Giza compared to Google, whose success is dependent on us not changing our favorite search engine.
But what if it is changed for us? What if Verizon, and AT&T, and Comcast, and half a dozen other huge broadband ISPs suddenly cut deals with some search company other than Google and your ISP-supplied browser and homepage no longer give such prominence to Google? The G-folk have rabid competitors who would very much like to take over that top spot. Would we even notice? How different are the search results these days from one engine to another? Not very different.
Yahoo, a company in crisis, fully supports Google's bold move, but you notice they didn't make it. Microsoft has been totally silent. Certainly Microsoft smells blood in the water and will be approaching all the outfits Google may have offended, trying to do exclusive search and ad deals with them.
So what Google has done is a bold and foolish act in which it is hard to find an upside for the company. If they intended to actually win the auction, which I wish they would, then they wouldn't have tried setting these conditions. They would just bid a truckload of money and walk away with the spectrum. But this thing they did do, what is it? It makes no sense at all, and one could argue, in fact, that is fiduciary suicide.
I have thought long and hard and I can see only two ways this could have come about. The first possibility is that Google has begun believing its own press releases, which is not a good idea for any company. Google is an arrogant and geeky company with leaders who have isolated themselves to the extent that they may no longer be in touch with reality. So much success so quick may have convinced them they are smarter than they actually are. It happens a lot. It could be happening here.
That's the most likely and saddest possibility, but it also means that if Google blows it, well then Google deserved to blow it. There is, however, an alternative motivation here beyond simple megalomania and corporate self-delusion: Google may actually be playing a game of poker.
This could be a fake, a head feint on Google's part. By attempting to set these conditions on any eventual auction winner, Google is tacitly telling the mobile carriers that it really doesn't intend to bid or doesn't intend to bid above the $4.6 billion threshold. Emboldened by this the telcos, who are also arrogant and have a kind of reptilian craftiness, may decide to save their resources and only bid, say, $10 billion. But what if Google bids $20 billion? Well then it's a whole new ballgame.
I hope that is Google's plan, but I fear that it isn't. |
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