Pennington Gap Broadband Planning Project

This brief report discusses the fact that airlines are dropping nonstop flights even to and from major cities like New York. For business, this is devastating, as the increased cost of tickets can, to some extent, be moderated via other cost-cutting measures. But sending business people on trips that take all day instead of three or four hours is devastating, because you can't recover the lost time spent traveling.

Like it or not, business videoconferencing is going to become much more important more quickly, and bandwidth (or the lack of it) will determine how much it is used in any particular community or business area.

This Slashdot article quickly gets into a down in the dirt technical discussion, but the question about full time video to elderly parents is an indication of what is coming. If you browse through the comments, what you quickly realize is that people are already doing this routinely. What is missing is high quality "like you are there" connectivity. Some companies like Accenture are already experimenting with full time HD video links for exactly this application, and telehealth and telemedicine uses of the same equipment are not far behind. We just need networks capable of providing the bandwidth.

Using EVDO cellular data technology, you will be able to buy a Chrysler with built-in Internet access. The pricey feature includes everything you need to plug in a laptop and surf the 'net while traveling down the highway. You will have to have a cell tower within range, but the Chrysler option and what is likely to be many more competing systems, including after market add-ons, is likely to be popular with anyone who drives a lot. This approach is already used heavily by police and sheriff's departments so that patrol cars can have some Internet access over wide areas.

In a series of broadband planning meetings earlier this week, I heard about several companies that were seriously considering moving their operations to another city if the local electric power infrastructure was not improved. The firms said they were experiencing multiple outages per month that often lasted an hour or more.

It is not just "old" manufacturing businesses that are vulnerable to electric power interruptions. Any firm that uses IT to manage their business (i.e. almost all businesses) can be affected by power outages, and sudden power outages can not only stop business and manufacturing processes, but can also stop ecommerce as well, if the servers taking orders are offline because of power interruptions.

Economic developers: When was the last time you asked your businesses about the reliability of their electric service? Do you want to lose a relocation prospect because of lack of quality electric power?

A radio report this morning indicated that for the first time, more than half of college students are living at home. The high cost of college is causing a spike in enrollments at local two and four year schools, where the students can commute and avoid the high cost of room and board. In a recent conversation with folks at the University of Memphis, they indicated a 20% jump in enrollment for online classes.

The increase in the cost of commuting--to school, not just to work--will continue to change the way people acquire a college degree. We will see many more people supplement traditional classroom instruction with online attendance, and others will forgo the traditional four year program entirely.

Halifax County, Virginia public schools have an innovative program that allows high school students to graduate twelfth grade with two full years of college credit, and Halifax students are leaving their senior year in high school and enrolling at prestigious schools like William and Mary, UVa, and Virginia Tech--as Juniors! This gets more people into the workforce more quickly, and cuts the cost of a four year education in half. The Halifax K12 school system may well be the best school system in the country--in addition to this innovative college credit program, it has state of the art programs to teach video production, and is the only school in the country with Academy programs from elementary school all the way through 12th grade.

A new study out from Forrester says 9% of the workforce is already working from home for their employer, and another 22.8 million are running their own businesses out of their home. This adds up to a major demographic that is turning neighborhoods into business districts.

The report also highlights what Design Nine has been telling communities for a long time--you have to have business class broadband services in residential areas or you are choking off economic development. A major reason for communities to get involved in broadband infrastructure is to ensure the community can compete economically. If people can't work from home in your town, businesses and workers are going to go elsewhere. In other words, do you want to lose 10% to 20% of the jobs in your community because of a lack of broadband in neighborhoods?

According to Suzanne Morse, a long term commitment to quality of life issues in Chattanooga won the city a coveted Volkswagen manufacturing plant, which is estimated to be worth up to $1 billion in investment for the area.

"Cloud computing" has replaced "Web 2.0" and "social networking" as the latest buzz phrase. IT folks love buzz phrases, and the IT landscape is littered with them. Whatever happened to "client-server," "relational databases," "artificial intelligence," and "fifth generation?" All of those buzz phrases were based on solid and useful technical advances that were grossly oversold as the answer to everyone's problems.

Cloud computing is just the latest, and beware of vendors and IT staff claiming a modest 15% increase in the IT budget to develop a "cloud computing platform" will fix all current and future woes. Or beware of "free" online services that tout cloud computing. Over the past five or six years, as more and more people and businesses have acquired broadband connections to the Internet, it has become more practical to store data of all kinds (documents, email, etc.) remotely and use a desktop application or Web app to access that data. Google Apps is a perfect example, as well as more common services like Gmail and Hotmail.

In many cases, storing data in a "cloud" somewhere on the network improves accessibility, reduces costs, or both. But there are two problems. If you are relying solely on a third party to store your data, you may lose it, as did customers of The Linkup, who just discovered that the company lost large portions of paid customer data. Some customers apparently did not have backups.

Social networking sites also store data in a cloud, and a recent lawsuit over data stored by LinkedIn, a popular business networking service, illustrates similar difficulties. The legal problem arose when an employee left a company in the UK and started a rival firm, using contacts built up during his previous employment and stored online at the LinkedIn service. The employee was sued and the courts forced him to turn over the information; the courts agreed that the contacts represented confidential company data. But it was stored online by a third party and the account was in the name of the employee. And apparently the firm encouraged employees to use LinkedIn to manage contacts.

So beware of cloud computing; technically, it can be used to solve all sorts of datasharing problems, but like any new technology, it can introduce new policy and management issues.

The iPhone continues to break records. According to some estimates, Apple has sold 3 million phones in the first 4 weeks after the updated iPhone 3G was released. Last year, it took Apple three months to sell 1 million. One estimate suggests that Apple will continue to sell 800,000 phones a week for many months.

The App Store, which supplies hundreds of software applications, has also broken records, with more than 60 million downloads of software for the iPhone in the first month, and the store has been averaging $1 million per day in sales (some apps are free).

T-Mobile is feeling the pressure from the iPhone, as the company has announced it is also pursuing an online software store that will work with any of the phones it provides--a rather ambitious undertaking that spans several different cellphone operating systems. T-Mobile has been losing customers to AT&T as customers switch providers to get the iPhone, which only AT&T has.

NBC, which has exclusive rights to broadcast the 2008 Olympics in the United States, is apparently upset that people are simply not bothering to wait for prime time to watch NBC's repackaged broadcasts. Instead, viewers are simply going to the Internet and watching the Olympics on the Web sites of media outlets in other countries.

The Olympics is a long and complex series of events that has never fit neatly into a two hour evening broadcast, but in olden days (say four years ago), that was about all we had. The much wider availability of broadband connections and the widespread use of online video sites like YouTube provides people with alternatives to broadcast and cable TV. Right now, the video folks are watching is of generally low quality, but demand for HD online video is going to increase rapidly, and more and more people are going to want to watch live events in real time, not NBC time, and will want those broadcasts in HD format. And the current DSL and cable modem systems simply don't have the horsepower to deliver it.

Widespread availability of affordable broadband should bring better access to health professionals, especially in rural areas, where some kinds of specialists are not available locally. Wired reports on the results of a new study that shows that just using relatively low cost Webcam technology for diagnosing stroke patients results in better outcomes.

The long term implications are tremendous. As communities invest in broadband infrastructure that can support HD quality video, residents of those communities can expect even better medical treatment at lower cost, especially when travel costs (and the danger to the patient of long travel times) is factored in.

An article I saw in the local paper about hair dryers and a blog article from a < hraf="http://blogfromonhigh.blogspot.com/2008/08/wonderful-opportunity.html">local curmudgeon on the high cost of shipping furniture both suggest the same thing: we may be very near the point (or already at the point) where making everything in China and shipping 7,000 to 10,000 miles is no longer economical.

The note about hair dryers was in response to a question to the paper about the availability of U.S. made ones. The reply indicated a firm had just moved its manufacturing facilities back to the U.S. in part because of high shipping costs. The manufacture of furniture is even more interesting, since the wood for that furniture often comes from U.S. forests. So we ship the raw materials 10,000 miles, then ship the finished product another 10,000 miles.

But the global economy is not going away; it is simply going to shift resources around to find the lowest cost of production. It may be that the U.S. will be able to compete again. Communities with broadband will have a leg up, because manufacturing firms are not going to place factories in places where they can't receive orders 24/7 reliably. Global businesses want redundant telecom providers, redundant cable routes in and out of the community, and redundant electric power feeds (from more than one substation). It's an easy checklist for communities:

• Quality of life

• Class A office space

• Fiber-delivered broadband services

• Redundant telecom cable paths (and/or wireless redundancy)

• Redundant electric power to business and industrial parks

How many of these can your community check off?

U.S. Treasury Secretary Paulson has endorsed "covered bonds," which are a new idea in the United States but have been used in Europe for centuries, according to this article. Covered bonds are secured by loans carried on the books of the issuing bank. Keeping the loans on the books forces the bank to pay attention to the performance of those loans, unlike the mortgage mess, where mortgages were packaged, re-packaged, and sold until no one really knew how the mortgages were performing.

Covered bonds can be used as an investment vehicle for issuing mortgages, but in Europe, they have been used heavily by the public sector to finance infrastructure, and are backed by the governments receiving the funds. Why are they different than general obligation bonds? Covered bonds enable local governments to tap a much larger, global marketplace of capital funds, meaning more cash could be available for local infrastructure projects at lower rates because of increased competition among lenders.

Aptera Motors just raised $24 million in funding. The company plans to build a super-efficient car. That makes Aptera at least the second new car company in California, following in the footsteps of Tesla Motors, which makes the super-fast Tesla electric sports car. The increase in gas prices is going to create tremendous new business and economic development opportunities for communities that are out talking to their businesses and studying how to leverage energy assets and broadband.

AT&T, perhaps partly by accident, has probably created success story that is likely to become a business textbook case study classic. Its partnership with Apple has succeeded beyond the company's wildest dreams. Once a kind of also-ran in the cellular industry, customers are switching in droves to AT&T just to get an iPhone. And AT&T has wisely beefed up its network and is making massive investments to ensure its customers have a good signal in more places.

The iPhone is creating a majro change in the portable device and cellphone business, and I think the day of the cellphone is over, meaning that within five years, very few people will have a portable device that is primarily a phone. Going forward, every portable device will have to have a substantial feature set that provides many of the same functions and features of the iPhone.

Apple is probably not greatly worried, as the iPhone's potential is just now barely beginning to be tapped. The iPhone runs a version of the company's flagship OS X operating system, meaning iPhones are full-fledged computers, not just phones with a few extra features like an address book wedged in.

As I predicted months ago when gas prices first started to rise, the suburbs are about to undergo a transformation. USA Today had a front page article about the 'burbs and the changes. In Arizona, they are doing what planners have been recommending for at least thirty years, which is to redesign suburbs as destinations, rather than just a place to sleep.

By "destination," that means adding stores, office buildings, sidewalks, parks, and new downtowns, so that residents don't have to drive thirty miles to and from work.

Small towns and rural communities with traditional downtown Main Streets can also capitalize on this trend converting Main Street buildings into office space--with fiber broadband services. Small towns like Galax, Virginia, better know for some of the country's best barbeque and the Fiddler's Convention, is doing just that as a partner in the Wired Road.

The new search engine Cuil (pronounced 'cool') aims to take on Google, like a bunch of other search engines that have tried and failed to dislodge Google. But Cuil is designed and owned by a former Google staffer and her husband who just may pull it off if they have the financial staying power to slug it out over the next couple of years.

Cuil promises better search results by not just counting inbound links but by actually trying to parse whether or not the contents of a Web page are a good fit for the search terms. Cuil also promises a more usable format for results, which wouldn't take much, given that Google has not bothered to give itself a face-lift since the company started. Finally, the Cuil founders promise not to snoop around and store everyone's search results, a refreshing change from Google's policy of developing dossiers on everything you have ever searched for.

Cloud computing has replaced Web 2.0 as a popular IT buzzphrase. Nobody ever really knew what Web 2.0 was, but it sounded important, and a lot of small companies got lots of cash to "really important" Web 2.0 applications and services that were going to change the world, make a lot of money, and cure cancer. None of them made much money, and most of them made no money.

Despite the hype, Web 2.0 signaled a shift to much more sophisticated use of the Web, with much better Web-enabled interfaces. The secret sauce for Web 2.0 services and applications was broadband. Cloud computing takes these sophisticated Web apps and high speed data connections to the next level, where both desktop computers and portable devices like the iPhone are connected continuously to data and services hosted somewhere on the 'net (the "cloud").

Apple probably has the clearest vision for this; the company has provided nearly seamless integration of desktop computers and portable devices like laptops and iPhones/iPods with its MobileMe service. For $99 a year, you get "cloud computing," which means your various devices (e.g. desktop, laptop, phone) all stay synchronized more or less automagically--as long as you have some kind of high speed data connection attached to each device.

Cloud computing, despite the hype, is here, and will quickly become a business necessity, meaning communities that cannot provide their own businesses with the right levels of connectivity will suffer economically. And cloud computing, to work properly, has to work from home as well as from business locations, so residential broadband is business broadband. Finally, communities have to have broadband hotspots for business travelers, because those business visitors have the most urgent need for access to the "cloud" of data they use to manage their work.

This analysis of the current state of Internet ads suggests that some of the big ad brokers on the Internet (e.g. Google, among others) may be near an inflection point with respect to ad demand. Lookery, a firm that sells ads on sites like FaceBook and MySpace, just lowered the cost of its ads by 40%, suggesting very soft demand. And Google's AdWord system, according to the article, seems to be propped up financially by Google's practice of setting very high minimum cost per click fees.

I have always maintained that Google is making a lot of money from businesses that are willing to pay modest amounts month after month for a few ads. When times are good, it does not look like a lot of money. But when the cost of other business necessities like fuel and shipping go up, unproductive ads producing few results may be the first to go.

The National Association of Telecommunications Officers and Advisors (NATOA) has called for a range of policy changes and investments that includes a guaranteed right for local governments to invest in broadband and fiber as the preferred mode of access.