Here is another Wiki - this one is a Wiki with a twist, or a TWiki.  It is a particular implementation of a Wiki, having quite a nice feature set.  More interestingly, there are quite a few examples of companies that are taking advantage of the the software, including the likes of British Telecom, Disney, SAP, Motorola, Wind River and Yahoo!, among others.

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Here is another story from the Korea file.  Telecoms Korea had a piece on new phones and services to be introduced in Korea.  The latest model to be offered by KTF (a Korean mobile operator) features a mobile caption service which displays lyrics of the song played on MP3 phones in real time.  This is the first time I hear a mobile operator providing such a service.  Given the success that the ringtone download service had in regions such as Europe, I expect other Euro wireless carriers to follow suit.  This particular phone also comes with a 3-megapixel camera and TV receiver.  There are plans to add caption to all the MP3 phones or PDAs released through KTF in the future. 

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Natasha Netschay Davies had an interesting article about Wiki software about a week ago in The Globe and Mail.  In case you do not know what a wiki is, then nothing like checking out the definition on wikipedia, one of the most popular wikis in the web.  Wikis represent the latest innovation in the collaboration space - think of them as sandboxes where multiple users can jointly develop web content, without the need of programming skills.

Wikis can really cut down a lot of time on the development of product specifications, market requirement documents, and other projects that normally end up getting bogged down by multiple revisions by various people across an enterprise.  Moreover, wikis create a good environment for "group think" and instills a sense of community: the willingness to contribute to a collaborative effort increases substantially.

The article also talks about Socialtext, a Palo Alto (CA) start-up that successfully commercialized the wiki concept.  Hopefully we will see a lot more - this technology is one to watch in the upcoming years and will dramatically impact the collaboration space.

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Curitel, the South Korean handset maker that made the news in late August when it announced a deal to ship a new camera phone to Verizon Wireless (NYSE:VZ) also grabbed some headlines last week, with the launch of the P1, a slick-looking camera phone with a twist: speech synthesis.  Yes, the phone has text-to-speech as a built-in feature.

Given that the speech engine being used is in shrink-wrap mode, it might not have a large vocabulary.  The speech synthesis is done to output via voice the contents of the text data such as alarms, scheduling and SMS.

The cam-phone, which comes in different color models, is held sideways.  P1 is also equipped with a 2-megapixel digital camera and a 1.9 inch wide TFT LCD screen. (hat tip: Telecoms Korea)

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On the hunt for the coveted Ansari X Prize, one of the Canadian entries (the da Vinci project) announced last Friday that it was postponing its October 2nd launch.  The delay was caused by an inability to obtain a special material necessary to make two key parts.  This temporary halt means that Scaled Composite's SpaceShipOne, due to launch from California's Mojave Desert on Wednesday.  If the spaceship can repeat the same feat (i.e. reach an altitude of 62 miles or 100 kilometers) twice in a two-week time frame, it will capture the $10 million prize purse.

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Note: Canada also has another entry running in the contest: the Canadian Arrow, which was discussed here in a previous entry.   more »

There was an interesting InfoWorld article posted earlier this week about how Texas Instruments (NYSE:TXN) is skeptical about the prospects for a wider adoption of WiMAX.  The TI executive (Joseph Crupi, VP of TI's Broadband Communications Group, and the ex-CEO of Telogy, which was bought by TI) argues that the WiMAX could be an unfulfilled promise, just as the initiatives previously put forth by the Broadband Wireless Internet Forum (BWIF), an industry group that advocated for the adoption of proprietary specs for wireless broadband access a few years ago.  Crupi also mentions that operators for the most part still have not embraced WiMAX as a viable alternative to DSL and delivering broadband to the home.  The article mentions how China Telecom (the largest Chinese ISP) plans to rely on DSL to deliver broadband access to its subscribers, with WiMAX not being mentioned as part of the strategy.

But just because some service providers are slow in picking up new technology or the previous BWIF initiatives failed, is it fair to say that WiMAX is doomed to failure?  One has to wonder if underneath all of this skepticism, perhaps there could also be an effort to slow down Intel's (Nasdaq:INTC) quest to prominently figure in another segment of the wireless market.

That sentiment was echoed by Nancy Gohring in an article in her blog, WiFi Networking News.  She correctly notes that in the US only a few spectrum holders own the licenses suitable for WiMAX, and their interest in the technology has not yet been ascertained.  For instance, Nextel Communications (Nasdaq:NXTL) owns the spectrum, but hinted at using other proprietary schemes in that frequency range.  However, other major operators remained sidelined due to concerns of deploying in unlicensed frequencies. 

Besides spectrum, another obstacle for WiMAX is the development of the IEEE 802.16e specification for mobile wireless broadband.  This spec (part of the larger WiMAX 802.16 standard) is not expected to be ratified until the end of 2005.  Other restraints include base station interoperability and higher costs until that issue is solved and economies of scale can be achieved.

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Note: Thus far, the few operators that are rolling out broadband wireless services are mostly relying on other technologies using licensed spectrum (e.g. the JV between Allstream, Microcell and NR Communications, which operates in the 2.5 GHz band, providing services in Canadian locations such as Cumberland, Ont. and Richmond, B.C.). That said, in June, Intel announced a WiMax trial to provide Internet services in two Chinese cities, Dalian and Chengdu.

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Yesterday, I had posted a story on LG Electronics' strong performance in 3G wireless handsets.  At the end of the piece, I mentioned an article that I came across Telecoms Korea talking about a potential deal involving LGE selling its communications unit to either Nortel or Cisco (I discovered the original article on Tuesday this week, but could not find any official news item on Google News or any other source).

Well, today, someone e-mailed me a Dow Jones Newswires story claiming that that rumor is now official: LGE will spin-off its telecommunications unit and establish a JV with Nortel:

S Korea LG Elec To Set Up Telecom JV With Nortel - Report SEOUL -(Dow Jones)- South Korea's LG Electronics Inc. (066570.SE) plans to spin off its telecommunications equipment operations and set up a joint venture with Nortel Networks Corp. (NT.T) of Canada, reports online news provider edaily. The two companies plan to sign a memorandum of understanding and finalize details by the end of this year, edaily reports, quoting an LG Electronics official. LG Electronics' telecommunications equipment business posted a loss of more than 70 billion won ($1=KRW1,148) in 2002, but last year the business turned profitable to post a net profit of more than KRW50 billion, edaily says. A spokeswoman at LG Electronics said she couldn't immediately confirm the report. At 0517 GMT, shares of LG Electronics were 1.5%, or KRW900, higher at KRW62,000, outperforming the broader market's 0.4% drop. LG Electronics also makes mobile handsets, home appliances and plasma display panel televisions. -By Seoul Bureau, Dow Jones Newswires; 822-732-2165; djnews.seoul@dowjones.com

Interesting news item - but it is still early to jump to any conclusions until more details are announced.  For instance, I wonder if the JV will or will not include the 3G handset part of the LGE communications organization (the original report mentioned specifically that the 3G operation would not be a part of the JV exercise).  If so, then the deal makes sense for Nortel, since the company is actively competing in the 3G space, and this can create some synergies (e.g. Hutchison 3, a leading W-CDMA operator). 

However, speculatively speaking, there will be some duplication in the enterprise division (in terms of the LGE KTS and PBX, as well as the interest in KTS vendor Vodavi).  I would imagine LGE would keep its enterprise product lines and sell them in Korea and APAC (except possibly for Australia and other areas where Nortel is strong).  Nortel would still use its enterprise product lines in the remaining regions around the world.  Again, the information is still very fluid, so it is early to make too many conclusions.

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Note: The story originally appeared on Edaily, a respected Korean publication.  Since I don't speak Korean, I tried searching for LG in the text and found the article.  Then, finding an online Korean to English translation tool was difficult (Google's language tools currently do not include support for Korean-to-English translation).  Altavista does have such an engine, albeit the translation is not the best (I guess the engine is still a work in progress).  But here it is, in any event.  The URL is:

http://www.edaily.co.kr/news/exclusive/read.asp?newsid=02102486573423072&strPage=1&curtype=read

(scroll down to "Traduci una pagina web" and copy and paste the above URL).  Then, choose "da Coreano a Inglese" on the combo box and click on the button that says "Traduci".

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The CRTC VoIP hearings continued today, the final day of the three-day public consultation period that will determine the regulator's stance of VoIP.  Yesterday, Jeff Pulver posted his own submission to the CRTC in his blog.  Not surprisingly, Jeff pitched an FCC-like stance, much like the same position that I have been advocating here at TF.  But I liked the way he so candidly said:

"The default presumption should be that regulation need not apply. If a potential monopolist demonstrates that it cannot play fair, then it should be slapped silly."

Time will tell whether or not the CRTC will take a page out of the FCC book and adopt a minimum-regulation position.  Actually, it is not just the FCC that took that route; in fact, there are other countries such as the UK, Austria and Singapore that have also reached the same conclusion.  As Richard Stastny points out in his blog, it seems that regulators that have already dealt for some time with issues such as ENUM are apparently more forward-thinking towards VoIP (Ed. note: Richard has been one of the key players in Austria's ENUM initiative and has spread the ENUM gospel in a few VON conferences).

Once the hearings are completed, the commission will have to ponder upon a lot of issues, before making its final decision, which is expected to happen in the first half of next year.

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Update: Transcripts should be available sometime soon (now that the hearings are over) - check the main CRTC VoIP hearings page.

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According to Italian business news daily Il Sole 24 Ore, rival telecom equipment makers Alcatel (NYSE:ALA) and Cisco (Nasdaq:CSCO) are both interested in acquiring a majority stake in Italian softswitch vendor Italtel SpA.  Italtel reported a 2003 net loss of €24.2 million on sales of €691.2 million. 

As reported on that daily on Tuesday, US private equity firm Clayton, Dubilier and Rice, which has owned the stake (48.8 percent) for more than four years, now wants to sell it after the company put plans for an initial public offering (IPO) on hold due to market conditions.  Alcatel has made an offer for the stake and Cisco, which already owns 18.4 percent of Italtel, has indicated it wants to increase its shareholding.

Italtel's main client is Telecom Italia (NYSE:IT), which accounts for 65 percent of its revenues and holds 19.37 percent of its capital.  According to the article, the Italian telco has no preference between Alcatel and Cisco and only wants Italtel to be "effective and competitive".

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Two great sources on this story are a Light Reading (The Daily Payload) article and a piece written by Om Malik on his blog, Om Malik on Broadband.  The Daily Payload entry examines the various pros and cons for Cisco and Alcatel to make the acquisition.  Om, as usual, is a step ahead of the curve and looks at the final outcome, believing that the loser of the Italtel sweepstakes might go after another softswitch vendor (his guess is Veraz Networks).    more »

The results for the quarter ending June 30 are in and LG Electronics posted a strong performance, with net income increasing from roughly 494.4 billion won (about $427 million) versus 267.3 billion a year ago.

More remarkably, handset unit sales grew 89 percent from a year ago, to 9.94 million sets.  The strength continued in August, when LGE (LGEAF: Other OTC) registered a significant increase in 3G and US GSM phones.  Quarter-to-August handset shipment rose to 24.9% QoQ (or about 7.8 million units).  LGE has been one of the few global handset makers that have achieved sequential shipment growth and market share gains.  Apparently LGE and a few other Japanese players have been outpacing the large handset manufacturers (Nokia, Motorola and Samsung) in the 3G arena.  Smith Barney pegs LGE's global market share in the 3G segment at 26 percent, which is quite impressive.  Perhaps some observers did under-estimate LGE's strong 3G performance.  In Europe, for instance, LGE has a good presence (e.g. Hutchison 3, a leading W-CDMA operator).

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Note: Telecoms Korea recently had a post about rumors that LG will reportedly sell its communication unit (except the handset division) to either Nortel or Cisco.  Since I do not own a subscription to the site, I could not dig deeper into the story, but all my Google news searches have turned up empty thus far - any info will be much appreciated.   more »

The CRTC (Canadian Radio-television Telecommunications Commission) begins today three days of hearings on VoIP regulation.  A total of 33 industry participants are scheduled to make presentations as part of the public consultation hearings.  The list is a who's who in the Canadian telecom and VoIP arenas, including the likes of the incumbents (e.g. Bell Canada, Telus), CLECs (e.g. MTS/Allstream), new VoIP entrants (e.g. Primus, Vonage, Yak), MSOs (e.g. Rogers, Cogeco), telecom vendors (e.g. Nortel, Alcatel), municipalities (e.g. Calgary, Vancouver), E-911 organizations (Ontario 9-1-1 Advisory Board) and well-known VoIP evangelist Jeff Pulver (from Pulver.com). [Ed. note: Actually, Jeff has several entries in his blog on the subject, including this one, which links to a National Post story from Kevin Restivo.] 

These discussions are attracting a lot of attention south of the border as well.  Besides the Pulver.com team, the American media is following the story with interest, as it provides the FCC with some interesting insights into policy making.  Ellen Muraskin interviewed me yesterday for a piece she wrote for eWeek, and I anticipate that there will be more Canadian analysts providing their views to various US editors, reporters and key media people. 

Earlier this year, the CRTC issued a preliminary opinion which signaled that it was considering adopting a regulatory model for VoIP.  More specifically, the CRTC initial stance was that VoIP should be regulated as a "telecom service" for the incumbents (Bell Canada and Telus), whereas it should be treated as an "information service" by the rest of the competitors. The rationale behind this position was that there were a few folks concerned with a "no regulation" scenario in which Bell and Telus would adopt a strategy to drive other small players out of the market, by setting their prices for services artificially low or by providing Internet access and VoIP service bundles.

Bell and Telus obviously were not thrilled, as they would not only risk losing market share, but also would face an uneven playing field versus the competition (a cable player such as Rogers, for instance, would initially have an advantage over the incumbents).  From a strict fairness perspective, they have a valid point: rules should be ideally applied evenly across the board. 

So what is the alternative?  Reiterating what I wrote in a previous post here at TF, my opinion is that the CRTC cause would be better served by "light regulation" that is premised upon public service goals such as emergency service (E-911), law enforcement (CALEA) and universal service funding. The rationale of this focus on light regulation is to allow this nascent industry an opportunity to flourish. VoIP is still in its blossoming stages and innovation in this area should not be choked before the industry has a chance to grow.

So what should the CRTC do?  It is a tradeoff between allowing the industry to fully reach its potential (i.e. very "light regulation" evenly applied across the board) or regulating the incumbents while allowing the competitors some freedom (in order to prevent the incumbents from completely killing the competition).  It is not an easy choice, since each option has its merits. 

The ultimate goal of any regulator is to create a market as perfectly competitive as possible.  From a competitive perspective it is necessary to have at least a couple of strong players in the marketplace, without giving a clear advantage to either one of them.  The ILEC / MSO duopoly, while not the best "perfectly competitive" scenario, at least works because the two players fight for the same customer, offering a bundle versus bundle deal for triple play services (voice, data and video).  This is already happening in the U.S.  If the CRTC adopts its initial stance, MSOs would get an initial advantage in Canada (granted they are a bit behind their U.S. counterparts, but still, the CRTC would have to watch them very closely).

I would also make the case that Canada would benefit more from regulation only after the need for that regulation is proven to be necessary.  In other words, my suggestion is to keep regulation to a minimum and provide an even level playing field for all competitors.  Why not take a page out of the FCC book, since their initial VoIP stance seems to be working well?  The benefits of "light regulation" (i.e. just concerning public service goals such as E-911 and CALEA) far outweigh the risks of anti-competitive behavior from the incumbents.  And, even should the incumbents engage in such practices, the CRTC can always have the option of stepping in to avoid a large-scale industry consolidation.

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Release 1.0 of Firefox beat even Mozilla Foundation's own expectations, reaching 1 million downloads in four days and surpassing 1.3 million earlier today, according to the latest data on the SpreadFirefox blog.

The Mozilla Foundation was launched by Netscape back in 1998, and has not fared well in its head-to-head battle with Microsoft until recently. Back in 2000, Netscape had introduced a browser based on the group's open-source development efforts, but that effort eventually faded away.  It was spun off from Time Warner as a non-profit organization whose major goal is to create an open source challenger to Microsoft Internet Explorer (IE).

Now, there is growing speculation that Firefox is doing well not only because it represents another alternative for IE, but also due to all the problems that IE has been experiencing (e.g. the JPEG rendering vulnerability that was recently mentioned here).  Firefox is being introduced as a smaller and faster version of the Mozilla browser.

Could Firefox capture some of the IE market share?  Perhaps a small amount, but there are problems that come with that success, such as a higher level of security scrutinizing, and an increased number of downloads and users to support.  Regardless, these download numbers definitely represent quite a feat for Mozilla, which got seed capital from Time Warner, and subsequent contributions from Mitch Kapor and Nokia.

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Computerworld had an article last week that gave a pretty good insight into the current line of thinking of Microsoft's Linux strategist Martin Taylor.  In the interview, Taylor mentions, among other details:

- Novell (SuSE), not Red Hat, will be the key player that Microsoft will be worrying about:

So you think, in the long term, Novell is your greatest Linux competitor? No question, because they have the best point-to-point stack from the kernel through to the application layer and things that go on top of it. Now the challenge will be [that] they're going to need to do stuff to differentiate themselves from Red Hat, which then means that they need to find ways to basically almost have a customized distribution. And you can end up with Linux not being Linux, but Red Hat Linux being different than Novell SUSE Linux, Debian Linux and Mandrake, or whatever the case is. We're already beginning to see some of that with how they're taking snapshots of the kernel, where the kernel is and putting it into their distributions.

- IBM is a tough read, but not as tough a competitor because of their stance on the indemnification issue (against patent and copyright claims):

Where do you see IBM fitting into the competitive picture? I think that they're going to continue to take advantage of a services opportunity on the complexities in the Linux environment and say, "Hey, because of our global services business, we can cobble things together and try to veil that for the customer and deliver solutions."  ... I don't completely see the road map for IBM. In some ways, I don't think IBM completely sees the long-term road map for their Linux embracement, which is the reason why maybe they haven't stepped up to indemnify Linux in the way that HP has and some of the ways that Novell has and Red Hat has. They've really just stayed on the sideline and left their customers to sit there on indemnification and some other things.

- the indemnification issues (which were already raised here at TF) are weighing more into the decision-making process:

Any other surprises? The surprising thing, a little bit, is how predictable our conversations are now with customers. ... One other thing that's come up more over the last 12 months is this notion of indemnification [against patent and copyright claims]. More and more customers are asking us, "Help me understand what you do from an indemnification perspective versus HP or IBM or Red Hat or Novell." That's weighing into decisions more and more. ... Customers began introducing it and asking me about it more than I was introducing it to them. And I began to say, "Wow. We really stand behind our technology in a pretty aggressive way. We should make sure that we get credit for that compared to Linux in many ways." And it's actually been something that tips the scales sometimes when people are on the fence.

 

This was definitely a very interesting interview that is worthwhile reading!

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Most of us all have a good anti-virus program and are suspicious of getting e-mails with funny attachments, be those .exe, .pif, .bat, .scr, or other types of script or executable files. We tend not to open those, because we are suspicious about viruses, and while opening the e-mail file containing these attachments is not harmful in itself, double-clicking on those attachments can infect our computers with some really malicious viruses.

Well, that is no longer true anymore. Nowadays, even visiting a web site that contains some malicious JPEG pictures can be harmful. Microsoft warned last week that users who had not yet downloaded the Super Pack 2 upgrade to Windows XP are vulnerable to a flaw in the way the Windows OS handles the common JPEG file format. Dubbed "buffer overrun", this can be a way for some hackers to get bad code such as viruses or worms onto target machines.

Bottom line is all it takes for a user's PC to become infected is to visit a site with Internet Explorer that contains these specially crafted "bad" JPEGs. Other programs at risk include Office XP 2003, Office 2003, Internet Explorer 6 and other versions of Digital Image Pro and Picture It.

However, the good news is that users who have already downloaded Microsoft's Windows XP SP2 (Service Pack 2) will not be affected. My recommendation: if you haven't done so, the time has come for you to download and install SP2.

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I was invited to ROB-TV (Report On Business Television) on Thursday evening for an interview at Howard Green's 7 PM program (The Business News with Howard Green).  Earlier that day, Nortel (NYSE:NT) had warned investors that it might not meet analyst expectations for Q3, and that its Q3 results might be sequentially down from Q2.

Funny what a difference a few months makes.  Last time I was a guest at Howard's show, Nortel stock was going through a fast climb, as investors bid up its price due to the Verizon announcement and the bullish sentiment towards the company's VoIP prospects.  Back then, some financial analysts had some pretty unrealistic expectations and over-quantified the impact of that win (I specifically recall mentioning the words "irrational exuberance" on that occasion, borrowing the words from Fed Chairman Allan Greenspan to describe the big jump on the stock price right on that day).  Back then, I cautioned that the effort required to gradually migrate the existing carrier Class 5 infrastructure towards a converged IP architecture would take more than a decade instead of just a few years. 

Moreover, some people were saying all of Verizon's class 5 upgrades to VoIP would go to Nortel, which is a bunch of nonsense.  No carrier puts all their eggs in one basket and the same holds true for Verizon.  Lucent had been the incumbent class 5 switch supplier, with Nortel being the number two supplier.  Chances are that at best, the 18 month exclusivity deal signed with Nortel would put the company in the driver's seat, but still with Lucent as the secondary supplier and perhaps even Sonus getting a smaller third piece of the VoIP pie. 

I also mentioned that the impact of that deal to Nortel's bottom line could be of the order of $150-200 million in revenue in 2004 and $250-$300 in 2005.  Some good Wall Street insiders found out from the Verizon CTO that the true-IP Nortel solution was still being qualified in Verizon's labs and that it would likely not start being deployed until Q4 of this year, with packet over ATM transport solutions being used in the interim. 

Well, so what about the latest news?  Nortel had previously indicated that it would grow faster than the market, which was expected to grow in the mid-single digits.  The implication was a growth rate of between 5 to 10% for Nortel versus 3-6% for the market.  However, on Thursday, Nortel changed its guidance, mentioning that its own 2004 revenue growth would be in the mid-single digits, lower than what the market will likely grow at.  Immediately, Bay and Wall Street took the news badly, and the stock suffered. 

I was not as spooked by the news, despite the fact that my position might seem to be a bit like that of a market contrarian.  Nortel's strongest line of business right now is wireless (responsible for roughly 50 percent of the company's sales).  According to some insider information that I have received, chances are that this latest announcement likely is a reflection of a loss in an RFP from Cingular.  Nortel had made it to the final list for that 3G contract, but there are some indications that Lucent (or perhaps Ericsson or Nokia) were chosen instead.  But what about this possible contract loss?  Well, again, remember that this is UMTS, and Nortel was in the running, and the company will likely still win some Euro contracts in that area.  Interestingly enough, Nortel previously had missed on the GSM opportunity, as it was primarily a CDMA player in the wireless space.  So the news is not all that bad as it seems on the surface. Evidently, there were a few other factors behind Nortel's warning as well, probably including lower CAPEX expectations from wireless and wireline service providers. 

But Nortel remains well positioned, not only in the wireless arena, but also in VoIP, both on the enterprise and the wireline segments.  The company has a large installed base of Meridian One TDM PBXs and also Norstar key systems, and as this base begins to mature, Nortel will be well positioned to capture some lucrative IP upgrade and/or replacement opportunities.  More importantly, Nortel is also ahead of some of its competitors (such as Lucent) in the carrier space, where its softswitch can eventually replace the legacy Class 5 gear.  Lucent still has some catching up to do there, as evidenced by its acquisition of Telica in late May.    

The only question is whether or not CEO's Bill Owens aggressive commitment to reducing operating costs to 35% of revenues in the medium term (or 25 to 30% in the long term) is achievable just with the recently announced 3,500 employee job cut.  It might be eventually necessary to have another mini-cut in the future to achieve that goal, albeit it might affect a smaller number of employees (from 1,000 to 1,500).

The bottom line is that just as the great increase in the stock was not quite justified back in February, neither is this major correction.  Barring any unforeseen major surprises in the company's restatement of results in October (which is also currently overhanging the stock), Nortel's stock should eventually go back higher.

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Note: You can view the clip of the interview at this link.  Scroll down all the way to the bottom of the page and you will find me at the 7 PM program (Howard Green).  Howard mentions my name right at the start of the program and then, he interviews me for roughly 5 minutes at about the 23 minute mark (you can fast forward the video feed, right after the Bloomberg commercial).  This link will be up until early morning this upcoming Thursday, the 23rd of September.

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Yesterday, I came across a great article about spamming on Fred Wilson's blog, A VC, one of the most widely read VC blogs.  Fred mentioned his belief that the spam problem has been for the most part solved.  However, when he pointed this out to a crowd at a Kaufman Brothers Conference, he only got less than a third of the participants to agree that they had less spam in their mailboxes in 2004 as opposed to a year ago.  The article is really worthwhile reading, and even raises many other interesting points associated with spam (including some really over-inflated claims on how much spam hurts productivity - I happen to agree with Fred in that many of those estimates are really exaggerated).

But regardless of how much it takes to delete 100 spam e-mails per day, the key question is: has the spam problem really been solved?  Some of my colleagues in the analyst community claim that in fact they get more spam today than they did in the past.  Could it be that their firms are not filtering spam right on the server side?  Perhaps, but from my own perspective, I have been able to drastically reduce the amount of spam I receive in my own home mailbox quite a bit.  Of course, the problem has not been fully eradicated, but still, I get less junk mail today than I did in the past. 

And how was I able to achieve that?  By taking simple steps to protect my e-mail address, including not checking off promotion checkboxes when signing up to receive news e-mail updates, by not participating in Internet sweepstakes, by using an alternative e-mail address whenever posting news items, and by "buffering" my real e-mail address with an e-mail re-director (my MIT alumni e-mail account).  The reduction in spam was achieved in my case even without the need for me to install a spam solution on my home computer.  So from a personal perspective, spam has been mitigated to the point where it is no longer as bad a nuisance as it once was.

However, some Internet users might not be as savvy or have some of these options available to them.  For those folks, spam is still taking a big chunk of their daily e-mail volume.  In fact, spam is becoming so annoying that even a subgroup of the IETF (Internet Engineering Task Force) is seeking a solution to the problem.  Recently, there were a few news stories about how that committee (called MARID, short for MTA Authorization Records In DNS) rejected a Microsoft proposal based on its Sender ID technology.  While members of the subgroup have acknowledged the technical merits of the Microsoft solution, they did raise concerns once the company revealed that it owns a patent application  that essentially covers many aspects of what was previously thought to be a patent-free SPF (Sender Policy Framework) approach.  The IETF committee counts with many members of the open source community, who are concerned with how Microsoft will handle its intellectual property licenses.  The same line of thinking probably led Time Warner (NYSE:TWX) to rebuff Microsoft's proposal to help AOL users solve their spam problems.  eWeek has an article discussing how some open source developers might still go ahead and work on their own SPF solution, given their belief that the patent will probably not be issued due to prior work in the area, or that even if it does, it will be hard to be enforced.

In the meantime, even the U.S. government became concerned with the issue, and the FTC (Federal Trade Commission) has issued a report this past Thursday considering whether bounties should be used to help enforce last year's Can Spam Act.

So what's my own take about spam?  It is a problem that is gradually going away, but not so fast.  I believe that by mid-2005, we should see more refined e-mail validation open source alternatives being developed, although IETF ratification might take a bit longer.  But ultimately, those technologies will finally help us win the war on spam.

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Earlier this week (on Monday), Cisco (Nasdaq:CSCO) announced the acquisition of Dynamicsoft, one of the pioneers of SIP (the Session Initiation Protocol), which is becoming the next de-facto VoIP signaling protocol, gradually replacing H.323.  Anyone attending a VON show probably has some knowledge about the company, including its CTO, Jonathan Rosenberg, a well respected VoIP guru and SIP enthusiast. 

Under the terms of the transaction, Cisco will pay about $55 million in cash for Dynamicsoft, including assuming the company's debt of $3.8 million.  This was the second deal that Cisco has announced in less than a week, having purchased last Thursday network management company NetSolve for $128.7 million in cash.  Earlier in August, Cisco's acquisition of Israeli startup P-Cube (a developer of IP service control gear) was discussed here.

Dynamicsoft, originally founded in 1998 with VC funding from the likes of Capital, Sun Microsystems, and Piper Jaffray & Company, among others, has 104 employees.  The company was able to capture an impressive list of more than 100 customers, including BT, Deutsche Telekom, Level3, Sprint and Vonage.  Sprint, for instance, uses Dynamicsoft to build its push-to-talk mobile services, which enables cellular phone users to use their handsets as walkie-talkies. 

While Cisco was not an original investor in Dynamicsoft, the company had been one of Cisco's ecosystem partners.  The key goal behind the transaction is to strengthen Cisco's portfolio for the broadband communications market, including voice and data convergence in the wireline and wireless arenas.   Cisco obviously wants to allow it service provider customers to implement "subscriber aware" networks that can deliver next-gen VoIP applications and services.  These subscribers would be able to rely on SIP and presence elements to use real-time applications such as find-me/follow-me and IM.

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Note: This is the second part of a two series article (please follow this link to go to the first Technology Futurist IDF entry which discussed Intel's dual-core processing architecture plans).

WiMAX, the next frontier

During IDF, Intel put its weight behind WiMAX, the newest broadband wireless technology, via the official launch of its Rosedale chip.  Rosedale, the silver circle with a black square housing shown on the figure to the right, is an SOC (system-on-chip) geared towards networking equipment that will wirelessly connect end-users' homes or offices via a WiMAX-based broadband network.  Intel has already started sampling the Rosedale chip to customers (not incurring any revenues yet, given that field trials are only slated to begin next year).  While Intel is not the first vendor to introduce a WiMAX chip (other players such as Redline Communications already have WiMAX chips that are shipping), the company is certainly allocating a lot of resources to this project.  Intel believes that the wireless broadband market is poised for solid growth in the next three years, and believes that Rosedale can be a viable option to do last-mile fixed access to the home.

Despite that, the chip is not likely to contribute significantly to the company's revenues for quite some time, at least until Intel is able to drive the equipment down (from about $350 to below $200 for client equipment).  Ultimately, the goal is to reach the price point of Wi-Fi gear. 

WiMAX, also known as the IEEE 802.16 standard, is a wireless specification that can deliver two-way Internet access at throughputs of up to 75 megabits per second at long range.  WiMAX proponents claim that it can transmit data for distances up to 30 miles between broadcast towers, covering areas having more than a mile in radius, all of this at a speed exceeding current DSL and cable broadband capabilities.

Intel envisions three WiMAX models: fixed access (alternative to DSL or cable broadband), portable use (within metro zones) and a full mobile system that includes hand-offs as users move between cells (the IEEE 802.16 committee still has some work to do in delivering that mobility management).  The Rosedale design does not include the radio element (Intel plans on working with third-parties on that front) and enterprise functionality (i.e. routing or switching details that will be part of a yet to be finalized specification).

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Note: SearchNetworking.com spoke to Intel's Ron Peck (Director of Platform and Solution Marketing in Intel's WiMAX group) - the interview is definitely worthwhile reading.   more »

Sony (NYSE:SNE) announced earlier yesterday that it will buy Metro-Goldwyn-Mayer Inc. (NYSE:MGM), Hollywood's last major independent studio, for a price tag of 550 billion yen (or roughly US$ 5 billion).  The deal was struck on Monday, but the Japanese electronics giant's desire for MGM was well known before that, and it is not to understand why: access to an enviable library of 4,000 movies (including the famous James Bond series or Rocky movies), and a great branding recognition in North America and elsewhere in the world.  More importantly, this move also indicates Sony's continued wish to complement its audiovisual hardware portfolio with great video content (Sony had already bough Columbia Pictures in 1989).

Much has already been written about this, so I will mention a couple of great insights.  One is from Om Malik in his blog.  For a Japanese perspective, I enjoyed reading this article on The Asahi Shimbun (Japan's second largest newspaper).  Om and others believe that Time Warner (NYSE:TWX) will now spend its cash buying all or parts of Adelphia (Time Warner had over $6.2 billion in cash on its balance sheet at the end of the June quarter).  That process, however, is expected to be quite lengthy, given Adelphia's past and the fact that the latter's assets are not well known to the industry at large (Time Warner did reveal that it had not done its full due diligence as of yet).  One thing is for sure: despite the lengthy negotiations, MGM got quite an attractive price for its assets.  The $4.9 billion tag represents about a 7-8% premium over most Wall Street analyst valuations of MGM (Time Warner had bid between $4.5 and $4.6 billion for MGM).

As a side note, Malik also points out an interesting detail that was a part of the big merger:

Comcast and the Sony group have agreed on an arrangement that will enable the cable giant to distribute Sony Pictures and MGM content on its VOD platform.  A joint venture will be created and managed by Comcast, with the aim of creating new cable channels that feature Sony and MGM content.  Finally, the deal with Sony reportedly gives Comcast the opportunity to acquire a minority interest in MGM for approximately $300M.  Comcast and Sony say they will move forward on their distribution deal, regardless of whether the MGM acquisition is completed. In real world it is called dipping one's toes. Comcast has done exactly that.

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Last week, Intel (NASDAQ:INTC) revealed a few key details of its future strategy at the IDF (Intel Developer Forum) held in San Francisco.  There have been quite a few changes to Intel's original single-core roadmap, which was abandoned in favor of a plan that calls for the delivery of dual-core desktop, server and mobile chips in 2005.  The Q&A session following Paul Otellini's keynote (Paul is Intel's President and COO) was pretty interesting, although it left some questions still to be answered. 

Dual-core architecture

When questioned whether the dual-core processing would be based on the Prescott or Dothan architecture, Intel's position was the company is pleased with both architectures in terms of product quality and high yields.  Thus, Intel does not see the need for a new dual-core architecture and plans on having more than one dual-core design going forward.  Reading between the lines, I believe that for mainstream PC users, the Prescott chips will probably ship initially with higher volumes.  This is expected since the Prescott dual cores have been in production since February of this year, as opposed to the Dothan chips, which started being produced in volume three months later (in May 2004).  Another key factor is that the 64-bit computing extension makes Prescott attractive with the increased uptake in 64-bit operating systems and software, expected to intensify in 2005.  Prescott's thermal and power use for desktops is less stringent than what Dothan required for notebooks.  That said, Intel will keep on leveraging some benefits of Dothan's lower power consumption.

Also noteworthy to mention that Intel did showcase a surprise mystery chip (holding to its promise of not trying to match AMD's little dual-core Opteron demo the previous week).  [ed. note: A good friend of mine that was at the event told me of AMD's strategy to ferry folks attending IDF down the street to see its own dual-core 64-bit Opteron chip.]  Codenamed "Smithfield", the new chip (it was real silicon, not simulation, according to Intel) was demonstrated running a three-way videoconferencing call with document sharing.  According to some good Lehman Brothers' detective work, Intel was using a 915 Grantsdale motherboard (this board is currently used with Prescott).

High-end systems are expected to feature multi-core technology, which will feature a dual-core Intel Xeon MP processor named Tulsa, and an Itanium 2 processor codenamed Montecito (containing 1.7 billion transistors and 24MB of cache).  During IDF, Intel showcased Montecito for the first time. Each of Montecito's cores is able to run two instruction threads simultaneously.  The 4 processor Montecito box used in the demo ran concurrently ran 16 independent jobs.  The expectation is for Montecito to yield a performance increase of 1.5 to 2 times the previous generations' performance.

Intel is bullish on the uptake of dual-core processors for servers, desktops and notebooks, starting from mid-2005 and ramping up in 2006.   The company believes that by 2006:

• 85% of its server chip shipments will be dual or multi core
• 70% of its mobile chip shipments will be dual core
• 40% of its desktop chip shipments will be dual core

Intel's WiMax plans in a separate post.

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NASA scientists expressed their hope that samples that were extracted from the Genesis craft (which crashed earlier this week) can still be salvaged and provide valuable information about the solar system. Things did not look very promising on Wednesday after the probe crashed in the Utah desert, descending at 193 mph after its parachutes failed to open.

The capsule was launched in 2001 aboard the Genesis spacecraft and was returning to Earth with solar atoms, the first samples from space since the 1970s and the first from beyond the Moon.  The impact of the collision damaged the sealed canister containing the material.  However, NASA maintains that not all of the glass-like disks holding the particles had shattered.

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Paul Berberian (the chairman and founder of Raindance, a web conferencing company) wrote a thoughtful article (hat tip: Feld Thoughts) in his blog about how some companies are taking advantage of a regulatory loophole to provide "free" conferencing services:

Back to conference calling. So this is the scam / loophole - 1. Set up a CLEC where you buy your access from the ILEC (they have to sell it to you based on their cost - it's the law not a choice). 2. Set up a tariff and a relationship with a long distance provider where the access charges are high - the best way to do this is pick a region of the country that isn't densely populated or where the laws are more messed up. 3. Have users dial your local number - which is long distance for virtually everyone and make the long distance provider pay you for handing off the call to your bridge. 4. Have no intention of providing services like dial tone and access to help consumers gain access to more choices - strictly use the law to force the long distance company to pay you for handling the call. 5. Be small enough not to hit anyone's radar - sub $100M in fees. Voila - free conference calling for the user!

Paul argues that eventually, somebody is going to notice this and this loophole will end, but until that happens, a company such as AT&T is paying for this, thanks to the regulation of termination fees.  The purpose of the law is to open up competition and compensate carriers for their investment in the infrastructure.  However, this also opens the loophole exploited by "free conferencing" services.

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Earlier in the week, Verizon (NYSE:VZ) announced the sale of its Canadian telephone directory unit (SuperPages Canada) to Bain Capital LLC for a price tag of $1.54 billion.  SuperPages Canada had revenues of $293 million in 2003 and publishes 118 books, in addition to business directories competing directly with Yellow Pages in major cities of Ontario and, since last year, in Quebec.  Verizon was able to realize a nice profit on the transaction, since it originally bought SuperPages from Telus Corp. (NYSE:TU), Canada's No. 2 phone company, for $527 million in 2001. 

A Globe and Mail article indicated that the auction was hotly contested, with Bain outbidding rival phone book publisher Yellow Pages Income Fund of Montreal.  The final price tag was roughly 10 times earnings, which is a premium to the 8.5 times EBITDA paid on 5 sales of directory businesses in North America over the past 3 years. The Globe expects Bain to eventually sell a portion of SuperPages as an income trust.

But more interesting is to consider how Verizon will allocate the proceeds from the sale.  Some company insiders believe that at least a portion of the funds will be used to help finance Verizon's FTTP/triple play strategy.  Verizon is facing triple play competition from MSOs in addition to CLECs, which are expected to take advantage of regulatory arbitrage via UNE-P thereby tapping into Verizon's bank of local access lines.  Therefore, these sources maintain that Verizon is building up cash reserves to help finance initiatives in key future areas such as wireless, VoIP and FTTP.  The May 2004 sale of local phone, phone book, and other operations in Hawaii to Carlyle for $1.65 billion is another example of how Verizon's management is focused in shifting the company's resources to the above three areas. There are also rumors that Verizon is looking for buyers for about 2 million rural phone lines in New York State.

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Nancy Gohring had a noteworthy post on her Wi-Fi Networking News blog.  The article talks about a study conducted by the University of Georgia Mobile Media Consortium, which examined large WLAN deployments in the US.  I would suggest downloading the PDF, as the report's findings are quite interesting.

The study is careful to distinguish between a WiFi zone (a group of cooperating hotspots sharing a single management system) and a WiFi cloud (offering continuous coverage over a significant portion of a city's or town's geographic area, utilizing multiple hotspots).  Unlike a zone, a cloud offers contiguous and unified coverage.  A total of 38 clouds and 16 spots were examined.  The study looked at who was deploying the clouds and zones (city, company, economic development group / non-profit organization, property owner, tenant, university) and what was the purpose behind these initiatives (broadband service, economic growth, general promotion, safety, experiment, cost savings, bridge digital, education).

The research suggests that major purpose for clouds is to provide broadband capabilities to a community, whereas for zones, the raison d'etre is to stimulate economic development.  Most initiatives are owned by either a city or a company, however the majority of clouds are owned by a single entity, as opposed to zones, half of which have multiple owners.  802.11b is still the dominant technology supported, but a significant portion (almost a quarter) uses other radio systems (including 802.11g, WiMax, QDMA, and 900MHz).

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A cellular to WLAN roaming specification (dubbed UMA - Unlicensed Mobile Access) was published last week by a group of 14 noteworthy vendors and wireless operators (Alcatel, AT&T, BT, Cingular, Ericsson, Kineto Wireless, Motorola, Nokia, Nortel Networks, O2, Rogers Wireless, Siemens, Sony Ericsson, and T-Mobile USA).  This represents a first important milestone in establishing seamless roaming between the 2.5G/3G network and an 802.11 WLAN.  The key goal is for subscribers to be able to rely on the ABC  (Always Best Connected) model, which should enable their handsets to always attempt first to seek out an 802.11 connection (be it from an enterprise/home WLAN or a public WiFi hotspots) before attempting to connect to a carrier's wireless network.  Of course, from a consumer viewpoint, the goal is savings: access via a WLAN should typically be cheaper (or sometimes even "free") than via the mobile network.  But from the vendors and carriers' perspective, this new standard should pave the way for the inclusion of WiFi in most cellular packages and support for seamless roaming in future handsets.

As far as pricing models go, I expect that the wireless operators will initially bundle the WiFi minutes, albeit at a cheaper rate.  Therefore, a typical monthly package will have X minutes worth of GPRS/CDMA access and Y minutes worth of WiFi access (where Y>X).  But eventually, competitive pressures will probably drive some service providers to offer unlimited WiFi access for an extra monthly flat fee (which could cost anywhere from $5-7 to $15-20).

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The existence of bandwidth-intensive applications is one of the key drivers for fiber to the premise, be it for consumer (FTTH - Fiber To The Home) or business (FTTD - Fiber To The Desktop) applications. Bandwidth demand varies by application and customer type. At the low end, a couple of G.729 calls entail only roughly 48 kbps (assuming 8 kbps of data and 16 kbps of overhead, or a total of 24 kbps for each). At the high end, a consumer application such as HDTV can chew up 19.2 Mbps worth of bandwidth.

One of the key determinants for both the business and consumer market is the cost of the “endpoints” (i.e. connectors and the electronics). Currently, there is a significant pricing differential between fiber and copper for connectivity items such as NICs.  As the price gap becomes narrower, fiber gets to be more attractive.  This NWFusion article, for instance, shows the trend: Foundry was the first to ship a pre-standard 10 Gig port on its BigIron switch in 2001 at a price tag of roughly $80,000 for the module and the optics.  By contrast, nowadays, vendors such as Cisco, Extreme, Force10 and Foundry have products at the $4,000 to $7,000 price range for a fiber-based Gig Ethernet port.    

The future development of new bandwidth intensive applications can also favor the fiber, particularly once the bandwidth demand reaches a point where copper can no longer meet it.  That said where is the "killer app"?  Probably not out there yet.  But still, there are enterprises that are deploying fiber as a means of future proofing their networks.  Similarly, fiber is being deployed in new high-end residential projects (with the cost typically being passed on to the owner) and the retrofit market (fiber is being rolled out in homes being remodeled and also passed on to the owner).    

But a true disruption can happen with the advent of new copper specifications. The emergence of the 10 Gigabit copper standard (please be sure to check the IEEE P802.3 10GBASE-T Study Group Public Area Index) can pose a threat to the fiber optic cable market, because it will push the bandwidth threshold further up, thereby taking away the “future proofing” case for fiber deployment. 

One company to watch for in this space is SolarFlare, an Irvine (CA) startup that is backed by VCs such as Sequoia Capital, Foundation Capital and Intel Capital (Anthem Partners and Intel came on board on the second $17.5 million round secured by the company in early 2003).  SolarFlare is trying to replicate the success that Level One had in the 10BASE-T segment or Broadcom and Marvell had in the 100BASE-T space.  The company has a strong IP (Intellectual Property) portfolio, consisting of over 9 patents in process (and counting). 

SolarFlare believes it can solve the limits of the "conventional wisdom" Shannon model and achieve a 10GBASE-T copper solution via its unique approach.  The algorithms used in the chipset include sophisticated media-optimized signal processing and customized DSP engines.  These algols effectively reduce the noise levels, and therefore increase the channel capacity. 

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Note: The noise level reductions in are in both near and far-end crosstalk (crosstalk is the noise or interference caused by electromagnetic coupling from one signal path to another). The near-end crosstalk is measured at the end from which the disturbing signal is transmitted, whereas the far-end crosstalk is measured at the opposite end from which the disturbing signal is transmitted.   more »

The Office of Communications (Ofcom), the U.K. telecom industry regulator, announced earlier this week that it is establishing a new area code (056) for VoIP numbers with no specific location. This new batch of phone numbers can be assigned to accommodate the emerging market for cheaper VoIP calls, including, for instance, subscribers running softphones on a laptop and connecting anywhere via a wireless broadband or 3G link.  Moreover, the new VOIP-only area code is more efficient because it frees up the trunks normally utilized in the call forwarding scheme that BT employs to route the calls of defected subscribers. 

Ofcom will allow consumers to either switch from their existing 11-digit telephone number to a new 11-digit broadband number or take a new 11-digit number starting with the more recognizable regional prefixes "01" or "02".  Some customers will have the option of keeping their existing 11-digit number after switching. 

Ofcom also mentioned it would run a public consultation (until the 15th of November) to determine what service guarantees and consumer protection guidelines new SPs must stick to.  Adherence to the traditional "PATS" (Public Available Telephone Services) set of provisions can become an expensive proposition, since a VoIP SP would incur the added cost of having a gateway to the public PSTN network.  Furthermore, requirements such as support for emergency calls and service continuity after a disaster would also need to be met.  Thus, it is not surprising to see organizations such as ISPA (Internet Service Providers' Association) lobbying that VoIP services should not be require to be PATS compliant.

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Some of the best findings sometimes happen purely by accident.  I was checking a web page to see if there were any updates to FCC Chairman Michael Powell's blog, and ended up coming across a great interview while browsing the AlwaysOn site.  In the two-part article, Michael Moritz, the Sequoia Capital guru, and Eric Schmidt of Google were asked by moderator Guy Kawasaki about the relationship between the VC and the CEO (as part of the Silicon Valley 4.0 conference - granted, it's been a while back, but the articles were only posted in late August)

Here are the two links for Part 1 and Part 2.  These articles are definitely worthwhile reading.  I particularly enjoyed the following words of wisdom:

On the secret behind Sequoia (from Moritz):

My partner, Don Valentine, who started Sequoia, offered this example very frequently. This is way before I was at Sequoia, but Don was in 1977 or so an investor in Apple Computer. And it was a fairly natural progression, if you're an investor in Apple Computer, to knowing what the shortcomings were to using cassette tape as a storage mechanism for personal computers in the late 1970s, to understanding the implications of what disk drives could do for personal computers. So Sequoia went ahead and invested in a couple of disk drive companies. And if you invest in a disk drive company, why, you're alert to the importance of the magnetic heads inside a drive company, so you invest in those. And if you're an investor in a PC company and disk drive company, you knew you had to have software running on top of it, so you went off and invested in a software company like Electronic Arts. And once you had your PC software enabled all over the place, you kind of understood that you needed to connect the computers, so you invested in an Ethernet company like 3Com. 3Com in turn led to Cisco. So all we're trying to do, in a way, is stay awake. Staying awake is probably the secret in the venture capital business. That's all you need to do, to be fortunate enough to be an investor in a company like Google—stay awake and inevitably it will illuminate the new market horizons and segments that are opening up. I think that's all we've done for 25 or 30 years, we just stayed awake.

On what gets Sequoia's pulse moving about a company (from Moritz):

Moritz: Losing our money. Kawasaki: On the upside? Moritz: The stuff that makes the venture business an incredibly invigorating place to be is back to what Eric was saying about why he was attracted to Google. Imagine every day in your life working with 25, 26, 27-year-olds who've got a fabulous idea, who see no boundaries, see no limits, see no obstacle that they can't hurdle—it is the most stimulating environment that you can ever be in.

And on how passion (and not necessarily age) is really the key element for success (from Moritz and Schmidt):

Moritz: No, no, no. I just want to point out that we were fortunate enough to play a part in hiring Terry Semel, who runs Yahoo today. He's 60 years old but has the metabolism of somebody in his 20s. You can have some old 20-somethings and some young 60-year-olds, but the passion is the enduring theme. Schmidt: About motivating people, you say that people want to make a difference. During the bubble, everybody thought they wanted to become executives or rich people or whatever. But if you actually think about human nature, people really want to matter. So if you can come up with something that really matters, you can build a great company around it. You just have to explain it that way. You have to literally believe, in your own heart, and convince the other people that you can change the world. There are numerous such opportunities here in the Valley. And those companies will be built based on that passion. And all these other details somehow get sorted out.

David Hornik made the same point above in an article on VentureBlog back in July.  Except, he egregiously used a more emphatic word than enthusiasm: fanaticism.

Regardless of whether you call it enthusiasm or fanaticism, it is important to add the qualifiers that mathematicians often use: this zeal element is a necessary but not sufficient condition for a successful startup.

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Here is one of the several reasons (albeit not one of the high ranking ones such as government action) why the Japanese are able to handily maintain their broadband penetration leadership over the US: the availability of great gear, often before other parts of the world (including - you guessed - countries such as the US and Canada, on the other side of the Pacific Ocean).  Case in point: the Yamaha RT57i (depicted on the figure).  My Brazilian Sansei friend Toshiro wrote me about this one (believe it or not, my native São Paulo had a huge influx of Japanese immigrants during the last century).  The Yamaha RT57i is a really cool broadband router.  What's nice about this NAT box is not only its support of IPv6 (the Japanese government is taking an active involvement in setting up good policies for the development of new technologies, and this IPv6 example was already brought up in a previous post here).  The true differentiator for the RT57i is its 2 RJ11 ports, which enable an end-user to plug in any analog phone and turn it into a SIP phone!  So 34440 Yen (approximately US$ 313, using the best price of a quick search in a popular Japanese comparison site and Yahoo! Finance's currency converter gets you analog to SIP conversion, ability to transverse a NAT and support of IPv6.  I tried to browse through other similar residential gateways geared towards the consumer market on our side of the Ocean, but I could not find any that would turn an analog phone into a SIP phone... perhaps a reader can prove me wrong (if so, please post! ;-) but for some strange reason nobody else had that bright idea over here.  I also asked Henry Sinnreich (distinguished scientist from MCI) about this (since he is regarded as one of the fathers of SIP, along with Henning Schulzrinne, from Columbia).  Henry is not only a brilliant scientist and ambassador of SIP, but also an experienced hacker who experiments with just about any hardware connected to SIP, VoIP, etc.  It turns out he already knew about the Yamaha box, but could not mention a similar device that would turn analog desktops into SIP phones (as of a couple of weeks ago, when I asked him about it).  Time for another harware manufacturer over here to do it!  Any takers?   more »

The Labor Day long weekend meant a car trip from Toronto to Chicago and the fulfillment of a long-overdue promise to my wife to visit the Windy City. Walking back to our hotel tonight, we passed by WGN Radio (the home of the Chicago Cubs on Michigan Avenue). The station had a nice display about the NASA mission to the moon in July of 1969, when Aldrin and Armstrong spent 2.5 hours exploring the lunar surface.

And that was a great intro to a story that I read earlier this weekend, about two astronauts who went on a spacewalk on Friday to plug in new antennas and replace a worn-out piece of cooling equipment.  This is the fourth and final spacewalk of a six-month mission for the current crew of the ISS (International Space Station).  American Michael Fincke and Russian commander Gennady Padalka will be replaced by a crew next month. The antennas will guide a new unmanned cargo ship built by the European Space Agency that will be launched to the ISS in late 2005.  Incredible how much science and space travel have evolved since 1969!

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IBM (NYSE:IBM) announced this past week that it has been working with Honda Motor Company (NYSE:HMC) on a new real-time car navigation system.  The jointly developed system provides hands-free functionality and uses speech recognition and synthesis (TTS or text-to-speech) to be able to identify street and city names that exist across the entire continental United States (this is a big vocabulary system, that contains 1.7 million street and city names and about 700 spoken commands).  Once the intended destination is spoken by the driver, the TTS engine will provide turn-by-turn voice guidance on how to get to that address.  The TTS engine provides a very natural voice (not synthetic or robotic, like most TTS engines from the past).  IBM and Honda were able to leverage hours of speech recordings from previous Honda systems.

Another value-add is nationwide dining information, which enables the drivers to request names and directions to restaurants.  The system is targeted to be standard equipment on the 2005 Acura RL model and also available as an option on the 2005 Acura MDX and 2005 Honda Odyssey in the U.S. and Canada.

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LM Ericsson (NYSE:ERICY) announced earlier this week that it decided to halt its Bluetooth development.  The Swedish based telecom vendor is shutting down the operation of its wholly-owned subsidiary which invented Bluetooth and became the driving force behind the wireless technology.  The move follows other companies similar exits from this market, including some that happened much earlier, such as Nortel.  However, this is not a complete pullback, as Ericsson is expected to carry on software technology development via its Mobile Platforms unit (another subsidiary). Moreover, the company will assemble a small, dedicated Bluetooth unit to support its existing customers.

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Yesterday, the City of Brotherly Love announced plans to turn all of its 135 square miles into the world's largest wireless Internet hot spot.  The ambitious project, announced yesterday by the city's CIO (Dianah Neff), has been pegged at around $10 million and calls for placing APs (Access Points) around the city on rooftops and lampposts.  Once operational, the network would enable users to access the Internet anywhere radio waves can travel.

The yearly OPEX for this undertaking was estimated by Neff to be around $1.5 million annually, geared towards supporting and maintaining the infrastructure.  In order for these costs to be offset, the city will probably need to charge a fee for the service, unless it can secure some advertising revenues, in which case the service would be free of charge.  Either way, Neff assures that a fee would cost significantly less than what is currently charged for DSL or cable broadband.

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The CNET article mentioned about similar initiatives in Amsterdam (where a startup called HotSpot Amsterdam launched a wireless network earlier this week), New York and Cerritos, CA. I am aware of other such efforts being pursued in Cleveland (where the service is being offered for free) and Los Angeles (which put an RFP out in July).   more »

Om Malik asks a question that surely is on every techie and Microsoft investor's mind: how is Microsoft (Nasdaq:MSFT) spending its colossal $7 billion R&D budget?  He was able to find a few hints on a recent Bill Gates speech at the Microsoft Research Faculty Summit, held in early August.  While I enjoyed reading the speech, I must confess that downloading the slides did not give me too much info, other than a few universities with which Microsoft is cooperating, including MIT, Harvard, Cornell, Carnegie Mellon and Illinois.  For good measure, Robert Scoble dropped in and left a few hints, including the Channel 9 video tour of Microsoft Research or the Windows Embedded Lab Tour.

That said, the home page for the event itself (the Research Faculty Summit) was also packed with links to various research initiatives including the Human-Computer Interaction Lab (HCIL), DateLens (an information visualization project) and Piccolo.NET (a toolkit to help build 2D graphics that users can interact with).

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Brad Feld's blog (Feld Thoughts) is a great source to learn quite a bit about the VC world.  In a recent posting, Brad talked about the re-emergence of the PP (Participating Preference) feature in term sheets.  In short, it is the right of an investor to get his money back before anyone else (as long he holds preferred stock) and then participate as if he owned common stock in the business.  Apparently, this "double dip" clause used to appear mostly in East Coast in the early-to-mid nineties.  After that, it disappeared, before making its way back (to both coasts this time) in 2001.  Read all about it - it's excellent material. (Hat tip: @argumente).

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David Isenberg highlighted in his blog (Isen.blog) a recent article from Business Week about how the U.S. has lost its broadband position vis-à-vis other OECD (Organization for Economic Cooperation and Development) countries.  The authors mentioned a troubling statistic: the U.S. broadband penetration dropped from the third spot (among OECD countries) in 2000 to the 10th spot (in 2003), behind not only Japan and Korea, but also countries such as Canada and Belgium.  As an interesting comparison factoid, a previous article in TF pegged the U.S. broadband penetration at 51 percent of home Internet users in July, versus 91 percent for Japan (in June). 

What's worse, the article points out, is that because of the loss of competitiveness in broadband, there could be a trickle-down effect in the applications space as well, since broadband access will be sine-qua-non for the development of technologies such as video conferencing, tele-medicine, IP telephony and even online gaming.

What is the chief culprit for the weak performance according to BW?  U.S. policy and the judiciary - more specifically, the Bells' victory of an eight-year battle to stop competitors from using their networks at deep discounts, forcing AT&T (NYSE:T) and MCI (Nasdaq:MCIP) to leave the consumer markets.  What was the consequence of that victory?  An oligopolistic market, which helps explain the imbalance between what U.S. consumers pay ($35) for a 1.5 megabit-per-second connection versus their Japanese counterparts ($25 for 26 megabits with Yahoo! BB).

So what is the catch-up plan?  Well, the article is a bit gloomy.  For instance, it does mention the promise of WiMax, but it claims that the better chunk of radio spectrum for wireless broadband is already taken up by TV broadcasters.  It also discusses some legislation that is being introduced and some RBOC plans to deliver FTTH and deploy more broadband infrastructure.

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My own take on this story is that some tidbits of legislation are helpful - for instance, the Japanese and the Koreans already have created policies to promote the development of IPv6 products (IPv6 is the next-gen protocol for the Internet), whereas there has been no such initiative in the U.S.  That said the real force behind any catch up effort is competition.  If anything, the triple play threat from the MSOs will force the RBOCs to accelerate their plans to deploy FTTH or at the very least, FTTN and better DSL (via ADSL 2+).  Fierce rivalries are the key: the better the competition, the better the prospects for progress.  A lot of Japanese DSL and cable service providers are trying to emulate the success of the Yahoo! BB model, bundling VoIP with broadband Internet and other value-added services.  The uptake of WiFi in Japan has also been impressive: Softbank BB (a unit of Softbank Corp. and Yahoo Japan Corp., which jointly own Yahoo BB) announced in mid-July that it is increasing the number of Yahoo! BB public-access WiFi hotspots to 5,000 by March 2005, making it the largest hotspot network in Japan.  J-COM is undertaking a similar initiative.  The U.S. can regain the edge by developing VoIP applications built around SIP (the Session Initiation Protocol), such as conferencing.  It would also be nice to see more operators (wireline, wireless and cable) rely on SIP to provision VoIP - such a move is all about flexibility and cost efficiencies.   

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