Investment and demand in fiber to the home

There are a couple of threads that, juxtaposed, are interesting. First, Australia moved ahead with its ambitious fiber-based Internet project, and second, this report gives one pause as to whether it would make sense in the US.

So is the US foolish in not making larger investments in infrastructure like our trading parters, is it wise?

The answer is not so simple and certainly not obvious because of the enormous delay involved in rolling out infrastructure. AT&T witnessed this when it signed on as the exclusive carrier of Apple's ground-breaking iPhone. Indeed, they are arguably still trying to make the investments due to the runaway success of the device.

Would the same thing happen with some as-yet unknown device (Device X), except with end user bandwidth? We don't know if Device X exists, or, if it does, what the impact on existing networks would be. The iPhone has shown us that the potential exists, but how can carriers (and their shareholders) be convinced to make large investments based on revenue streams that are highly uncertain at best? Should the government take these risks?

Tiered pricing and the rise of "proxynets"

This article over at Seeking Alpha is interesting. In it, Shelly Palmer argues that:

people with more money than time pay and people with more time than money steal. Piracy will run rampant, but it will be very easy to thwart because most of the consumption devices will require monthly data plans. If a device is connected to a network and the network operator has your credit card number or billing address, you will have a hard time using it to steal content.

The arms race will continue until the rigidity of the content provider pricing and network service provider greed overwhelm consumers or until a new technology evolves.

The new technology is what he calls "ProxyNets". In this scenario, the WiFi radios on smart phones will be used in the "ad hoc mode" instead of the "infrastructure mode" and will rely on mesh networking for interconnection. If the device density is sufficiently high (that is, the probability of participating radios being in range is high enough) then it will be possible to construct an informal network at low cost outside of a formal carrier relationship. You can even imagine jumping onto the Internet for some links (via an access point) if the density is not sufficiently high. The fact that such a network might exist outside of the control of a carrier, even if the quality is low, might be a "good enough" technology that could be the start of a classic "disruptive technology".

The argument is interesting and even somewhat plausible, especially since almost all smartphones now have wifi. In my international travels, I always jump onto a wifi network with my phone for data connections, since the carrier-based rates are punishingly high.

Are mobile "bar codes" a new standards battle?

On a recent canal tour in Amsterdam, I noticed a QR code emblazoned on the side of a canal. At the recent Google I/O meeting, participants were given T-shirts with these codes on them. The Pittsburgh Post Gazette also prints a QR code on the front page.

If you haven't interacted with these, the basic idea is that you can, through your mobile phone, use the code to access information. You need a code scanner/interpreter on your phone, which takes images from the phones camera, decodes them, and then passes the decoded information to your phone's web browser, which then calls up the web site via your wireless Internet connection.

Microsoft has developed a denser code which it is trying to popularize. This code uses colors and other shapes as opposed to the black-and-white squares used by QR codes. It is not hard to conclude that this Microsoft code is in many ways superior since it can encode more information for a given surface area.

On the canal tour, I started to wonder whether this is the latest incarnation of the standards battles, the most famous of which is BetaMax vs. VHS, and the most recent of which is HD-DVD vs. Blu-Ray. In this case, QR codes seem to have the early lead because of their popularity in Japan, because they can be printed in black and white, and because they have (implicitly) Google's backing. Microsoft, for its part, has given away the required mobile phone software but must now convince publishers and content providers to use its code.

Is it a standards battle? Is it one that is already over or will Microsoft's technology win the day in the end?