Network Neutrality: What Google and Verizon Should Have Said

Google and Verizon recently offered a "compromise" proposal that accepted Network Neutrality for wired networks with limited enforcement, but then carved out exceptions for wireless and premium services. Here are the main points I think Google and Verizon should have acknowledged:

(1) We understand that wireless airwaves and landline right of ways belong to the public.

(2) We understand that we have been granted a license or charter to provide voice and data communication services based on these public resources.

(3) Building and operating the nations communications network gives us a great deal of power. We understand that we have not been granted a charter to give ourselves or anyone else an unfair competitive advantage over any other lawful communication service that runs on top of our network facilities. The public's interest in an open Internet that supports efficient innovation requires this.

Point 3 is the crux of Network Neutrality. Verizon keeps trying to obfuscate the issue by saying they need the ability to offer premium services and manage the network which Network Neutrality would somehow prohibit. I respectfully disagree.  The issue is whether Internet data carriers can grant themselves an unfair competitive advantage by virtue of controlling the pipes.  The answer that best serves the public interest is "no".

Don't Get the iPad? Just wait a little, it will get bigger.

I've noticed a number of online comments and reports from people who say they just don't get the iPad and seem disappointed Apple has sold so many.  Imagine you are back in 1976 and Apple has just released the Apple II, the first off-the-shelf personal computer you don't have assemble from a kit.  Executives at IBM and Digital Equipment Corporation were puzzled what the big deal was.  Why would anyone want a computer at home?  Especially one that does so little?  Yet within less than 15 years, PC software was driving much of the computer industry. Why? People did want affordable personal computers at home, while others recognized the opportunity and wrote gorgeous applications that 10's of millions of users could enjoy.

Back to 2010: Why would anyone want an instant on, easy to use, location aware, Internet capable, easy to carry, mobile computer that does so little?

(1) Because it offers a great user experience that wasn't previously available.  The iPad is an ideal size for reading, allows you to keep the Internet within easy reach, and offers thousands of Apps to support whatever interests you have.

(2) The focus of innovation has shifted.  Some of the best and most creative new software is being written for the iPad.

When I worked at Digital in the 1980's, we had endless debates about the difference between a Personal Computer and a Workstation.  Many at Digital would single out some hardware difference: the larger display, better graphics, built-in networking, or even the price.  They were all wrong.  The real difference that mattered was the software it ran.

When Steve Balmer says "The operating system is called Windows", I think he's making the same mistake.

Don't get the iPad?  Just wait a little, it will get bigger.

Some Common Observations

It doesn't do Adobe Flash

Few mobile computers do because 3 years after the first iPhone, Adobe has yet to deliver a version of Flash that works well on mobile devices.  Some technologies that don't translate well to a mobile environment will be left behind.

It doesn't include a phone

Yes, and it doesn't include a $70/month phone bill and 2 year contract. Voice is not the primary App for the iPad, but you can use Skype or other VoIP services if you wish.

It's just a big iPhone

A swimming pool is just a big bathtub, but we use it for different things. The iPad is a comfortable size for reading.  The responsive touch interface, clever use of panning+zooming, and focus on one task at a time makes the device almost disappear as you become absorbed in the flow of what you are doing.

The landscape keyboard is good enough for lightweight typing, while adding a Bluetooth keyboard accommodates heavy lifting.

It doesn't include a camera

Yes, it's a v1.0 product that starts at $499.

It doesn't do multitasking

I expect we'll see this when iOS4 comes to the iPad later this year.

It doesn't do handwriting recognition

Yes, but there are plenty of note taking apps that will record and even recognize your scribbles if you want that. Part of what makes the iPad such a joy to use is that Apple did the hard work of thinking about what is essential to a great mobile experience, and what can be left out. Fumbling for a stylus to do pixel perfect input is not fun when you are mobile. I believe this is one of the key insights behind the iPad's successful user interface (time will tell). A lot of people choose not to carry a pen in their pocket everywhere they go.

It doesn't synch wirelessly to the cloud for stand alone operation

Providing a great user experience for system backup and restore, software update, synchronizing multiple devices, and managing large media collections is hard. Apple still sees the Mac (or PC) as the hub of your digital life style.  Many professionals (like me) are not ready to trust all their personal data to the cloud. Apple's approach feels safe and inspires confidence. If you've ever upgraded from one iPod to another, you know how easy this is.  Over time, I expect we'll see more options that migrate services to the cloud.

A Better Response to Growing Markets

I've written before about AT&T's capped data plans and what I feel is a lame $20/month additional charge for tethering.  Since you are already paying for the amount of data you use, why should you have to pay extra for tethering? I suspect there is some marketeer at AT&T who recognizes there's a strong demand for tethering so they can charge extra, why leave money on the table?

What the wireless carriers are missing is that demand for wireless services is a huge growth market.  By increasing capacity and driving down prices, they could dramatically increase the size of their business.

The PC revolution is going mobile.  We need 10 or 100 times the bandwidth currently available.  If you build it and price it right, you'll attract way more business than by trying to monopolize on the current shortage of supply.

iOS4 vs iPod Touch Battery Life

With the release of iOS4, my iPod Touch (2G) gained the ability to remain connected to Wi-Fi even when locked or in sleep mode to receive push notifications (or VoIP calls in the background).  The implications for battery life however are not immediately apparent.

Having lived with iOS4 on my iPod Touch since WWDC, I was initially caught off guard by the significantly reduced battery life.  Previously my iPod Touch could go about a week without recharging, as I used it mostly for listening to audio an hour or so a day, and occasionally for looking up other information.  After installing iOS4, battery life dropped to a couple days, or even less depending on the application I was in.

It turns out the WWDC application needed to be updated for iOS4 to conserve battery life, but more importantly, it had enabled "Notifications", the 3rd item under Settings.  With notifications enabled, an iPod Touch will stay connected to a Wi-Fi network even while in sleep mode, thus burning through the battery much faster than I had previously experienced.

If you use an iPod Touch mostly as a music player and don't normally need notifications, be sure to leave this turned off in the Settings application, or select Airplane mode when you don't want the radios to remain active.

Enjoy!

- Peter

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Update 6/28/2010

Several users report their battery is still being drained while their iPod Touch 2G is sleeping.  I believe this means other applications are activating the radio.  Since the iPod Touch 2G doesn't officially get "multi-tasking" even with iOS4, this means one or more of Apple's built-in applications which are authorized to run in the background are implicated.  I see two solutions so far:

(1) Use Airplane mode to explicitly prevent the radios from powering on.

(2) Review your iPod Touch Settings and disable any background network access.

Settings -> Notifications = Off

Settings -> Mail, Contacts, Calendars -> Fetch New Data -> Push = Off

Settings -> Mail, Contacts, Calendars -> Calendars -> New Invitation Alerts = Off

Settings -> WiFi -> Ask to Join Networks = Off

I hope Apple adjusts the default settings or provides an option to restrict network access while the iPod Touch is locked so unsuspecting iPod Touch users are not left to resolve battery life issues on their own.

AT&T's Capped Data Plans

AT&T recently introduced a capped data plan for iPhone, iPad, and other smart phones

http://www.engadget.com/2010/06/02/atandt-makes-sweeping-changes-to-data-plans-iphone-tethering-comi/

I see some progress, but also some old thinking. Unlimited data is a thing of the past. Bravo. Everybody knows this was an unrealistic model that is in conflict with the increasing demand for data services. There is a practical limit on how many minutes a person can talk in a month. There's no obvious limit on how much data a person can use. To charge per minute for talk, and offer unlimited data makes no sense.

 

Tethering is $20/mo extra. That's disappointing. Now that you are charging for the amount of data actually used each month, there's no inherent justification to charge extra for tethering. It looks like a money grab.

 

If I want to use tethering to handle my Email a few times a year because I prefer the larger screen and keyboard of my laptop, AT&T says no dice, that will be $20/month extra. That doesn't leave me feeling warm and fuzzy about our relationship. It feels like you are charging extra for something that doesn't cost you any more to provide.

 

If you eat the bread with your left hand, it costs $25 per month.

If you eat the same bread with your right hand, it costs $45/month.

 

Lame.

 

Corporations and Profit

"People forget that Apple is a corporation, and that the purpose of a corporation is to make money."

While this cliche is widely accepted, it's incomplete and often misleading. The purpose of a corporation is to create value by serving customers. Often that value is used to reward shareholders, but that's not the sole purpose. The distinction may be subtle, but it is not unimportant as I explain below.

Consider a company that sells a product in the market.  The company creates "use value" in the eye of their satisfied customers who buy the product.  They then use the corresponding cash value to pay their employees, suppliers, and reward their shareholders. Saying the purpose is to reward shareholders is putting the cart before the horse. Rewarding shareholders or "capitalism" is a tool for raising and concentrating capital.  An important tool to be sure, but not the purpose of business itself.  You don't go into business to raise capital, you raise capital to expand and grow your business.

The confusion arrises because CEO's often serve at the pleasure of a Board of Directors who are elected by the shareholders, so Wall Street investors like to claim the CEO's job is to serve the shareholders because it gives them more leverage. But before a company becomes a giant publicly held corporation, the original CEO was a self appointed company founder who had an idea to start a business by serving customers.

If you are an engineer or product developer working at Apple or any other technology corporation, what keeps you awake at night? Are you obsessed with how to make money for your shareholders, or do you spend more of your time thinking about how to create something of value for your customers?

Here's a simple thought experiment:  What is the purpose of our economy?

 A.  To organize production in such a way as to provide the goods and services people want.

 B.  To provide a profit to shareholders.

Business organizations exist within the context of an economy whose purpose is to serve customers. Of course both points of view are valid. They are just different interpretations of our economic process. But B leads to awkward economic distortions like high executive compensation and accounting shenanigans as companies are tempted to finagle their books to make a stock appear more attractive. In many ways, this mis-understanding of business is at the core of our recent financial and banking woes. Even our education system is suffering from confusion over measuring standardized test results ("the bottom line"), versus serving students where they are.

Imagine a CEO of a company with a large market cap who sees their stock price increase by 10% on his watch.  To his shareholders, this could be worth billions, so paying the CEO tens of millions is a small fraction of the value created for shareholders.  Yet the company hasn't really created more value if it isn't creating more satisfied customers.  You could say the shareholders are bribing the CEO to pay themselves (or threatening to fire him if he doesn't deliver).

If you are the CEO of Enron, you might be tempted to sell lucrative contracts to companies that you agree to buy back later and count these sales as revenue. If you are an investment bank, you might be tempted to securitize sub-prime mortgages... Looks great on paper, but nothing of use value has actually been created, only a contract or paper that appears to be something it isn't. All the while your executives and shareholders enjoy a nice windfall and will be very pleased with you until the bubble bursts. The last years I worked at DEC, I saw the company repeatedly mortgage its future to serve its shareholders.

Thankfully many business leaders know better. But the pressure to serve shareholders can be a huge distraction.

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A good lens to evaluate Apple's competitive moves is whether maintaining tight control of the platform and user experience helps Apple continue to innovate and serve their customers more than it hinders 3rd party developers who would like to help the platform serve those same customers.

A key component of previous business computing platforms has been access to 3rd party solutions that need to work in more than one context to be cost effective and manage risk (other companies don't like being totally dependent on a single vendor either). From Apple's perspective, allowing these cross platform solutions reduces Apple's unique differentiation and ability to advance the platform on their own terms. Apple claims that cross platform tools produce substandard apps, but Apple uses many such tools in its own software and has made code re-use and cross platform UNIX tools and technology the basis of its Mac OS X strategy. If Apple wasn't worried that such solutions could be compelling, there'd be no reason to restrict them. The issue is not whether cross platform tools can be effective, but how they are applied and shape the platform experience.

Apple's usual strategy is to focus on the consumer first while doing just enough to remove barriers to corporate acceptance. Outlawing the use of any(!) platform independent language tools threatens to upset this balance. [Update, Apple has backed off on this issue as expected.]

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Why No Apple In The Food Industry?
"Focus on delighting customers, not on making money"

Another perspective on Adobe's situation

Steve Jobs Solved the Innovator's Dilemma

The Dumbest Idea In The World: Maximizing Shareholder Value

Thoughts on Batteries and Laptops

Battery life has two dimensions: (1) how much charge the battery can hold, and (2) how this capacity changes over time.

In my own experience, I wore out a 13" PowerBook G4 battery in 13 months, bought a replacement, and saw it wear out again in about 14 months just by keeping the machine plugged in and sitting on my desk most of the time. After the 2nd replacement battery wore out (held less than an hours charge), I got more interested in what was going on and made some changes. The most visible change was keeping my laptop on a cooling stand.

When fully charged, Li-ion batteries have a limited shelf life and lose around 20% of their capacity per year. High charge levels and elevated temperatures hasten permanent capacity loss.

 

I was stunned to learn this, but it matches my own experience. The combination of normal laptop running temperatures (warm), and a fully charged Li-Ion battery was less than ideal. Contrary to popular wisdom, keeping Li-ion batteries fully charged as much as possible shortens their life.

Where did this popular wisdom come from? First, it is vital not to allow Lithium Ion batteries to completely discharge as this can create a safety hazard and will shut down the battery permanently. For this reason, the power system is designed around the battery used and shuts down when the charge becomes dangerously low. Second, deep discharge cycles are also known to hasten capacity loss. Since there is no "memory effect" with Li-Ion, waiting until your battery is nearly discharged is undesirable. For a typical portable device, this means it's best to charge the battery early and often.

But not all portable devices are used as portables anymore. A glaring omission from typical laptop systems is a feature to maintain the battery at less than fully charged to extend its useful life. My laptop easily spends 90% of its waking hours plugged in. I simply don't need the battery to be fully charged most of the time. As laptops have come to replace desktops for many users, the design of the battery system has failed to keep up with how it is often used. The ideal charge level for storing a Li-ion battery is around 40%.

One of the challenges Toyota faced in designing the Prius was battery longevity. Part of the solution they adopted was to maintain the battery between 40-60% charge as much as possible. The Prius uses nickel metal hydride batteries, but the principle is similar. Batteries last longer if you treat them gently.

You might be tempted to remove your laptop battery completely, but this is not a good idea. Modern laptops use the battery to smooth out spikes in the power consumption. If you remove the battery, the machine will respond by dropping the CPU speed to bring the entire system within the upper limit of the power supply.

Apple's latest designs use integrated Li-polymer batteries, so removal is impractical anyway. I don't know how Li-polymer batteries compare exactly, but the principle should still be valid. It would be helpful to make a distinction between charging for maintaining battery capacity (useful lifetime), and charging for the longest run time.

 

Links:

iPhone 3GS Lithium-Ion Battery Life