Posts about open

The Verizon saga continues

Today, I sent this complaint to the FCC about Verizon Wireless’ continued refusal to connect my Google Nexus 7 tablet to its allegedly “open” network. It is addressed to Robert Ratcliffe, acting chief of the FCC Enforcement Bureau, with CCs to Ruth Milkman, now the FCC Chief of Staff, and Gigi Sohn, the newly appointed FCC Special Counsel for External Affairs, in addition to William Johnson, a Verizon attorney, and Matt Wood and Josh Stearns of Free Press. I’ll report what I hear as soon as I hear it.

Dear Mr. Ratcliffe,

I write to follow up on my complaint filed with the Commission regarding Verizon Wireless’ continued refusal to connect my Google Nexus 7 LTE tablet to its network as required by the openness clause of the Block C spectrum sale and your Bureau’s consent decree with the company in July 2012.

I went to a Verizon store in Bridgewater, NJ, this weekend and was told that the device still could not be activated and added to my existing data account. Verizon Wireless is thus in continued and flagrant violation of the spirit and letter of its agreements with the FCC and is also in violation of its own statements and assurances to the public.

If the Commission does not order Verizon Wireless to immediately accept the Nexus 7 onto its network and if Verizon does not suffer consequences for its recalcitrance in this matter, then the FCC’s policies and orders on open networks will be rendered toothless and meaningless.

To review the timeline:
* Google announced the Nexus 7 LTE as compatible with Verizon’s 700 MHz network on July 24 of this year.
* The LTE version of the device became available and I purchased it on September 9. Upon delivery, I went to a Verizon store in Bridgewater, NJ, to get it connected and was told it could not be added to my account. Twitter exchanges with Verizon ensued, which exposed the company’s refusal.
* I filed a complaint with the Commission on September 18 (attached). Counsel for Verizon responded to that letter and I responded in turn on the next day (also attached).
* Verizon made public statements about the device needing to go through its own certification process — a contention I will challenge as the device had been certified by the FCC and has proved to work on LTE networks around the world. In any case, the company said that the device entered this process in August and that the process generally takes four to six weeks. Thus the device should have cleared this needless certification sometime between the first of September and the middle of October. It is now November and Verizon still refuses to connect my device.
More detail of the incident and my exchanges with the company can be found on my blog at http://buzzmachine.com/tag/verizon/.

Let me be clear that in the end, the issue is not Verizon’s certification or even the FCC’s but the definition of “open” and whether any device complying with published standards can connect with this network. If the network is truly open as the Commission has decreed, then any device that meets standards for the network should be connected to it with no proprietary certification required. In the Nexus 7, Asus has manufactured a device that meets these standards, has been certified by the FCC, and works on any compatible network as clearly demonstrated with worldwide use. For Verizon to hide behind its claim of a right to certify only brings needless confusion to the Commission’s rules and rulings about open networks. Please consider what happens when the modular phones envisioned by Phonebloks and Project Ara at Google and Motorola are offered and independent, open-hardware makers create devices that are built to open standards: Will Verizon demand to subject every device to months of alleged “certification”? How does that make a lie of open networks?

I also should note that this week, Verizon announced its own competitive seven-inch, LTE tablet, branded the Ellipsis 7. Of course, Verizon is free to sell its own device — indeed, the more competition and consumer choice, the better. But that should have no impact on its support of other devices on its open network and it certainly does not excuse Verizon for refusing to connect the Nexus 7. The fact that Verizon has its own, similar tablet is only more reason that it must be compelled to support the Nexus 7 or else its “open” network is not open at all.

I reiterate my complaint against the company and appeal to you to compel Verizon Wireless to connect the Nexus 7 LTE. I also urge you to consider punitive action so as to underline the importance of open networks, of following agreements and orders from the FCC, and of treating consumers with respect and honesty.

UPDATE: Verizon says that it will wait until Android 4.4 KitKat is installed, arguing that there were “system” issues in certification.

I smell a rat and I’m looking for the tail. The device has worked with *no* problem on any other LTE network. I got it to work fine on Verizon’s network. What could these problems be? I expect the FCC to ask for clarification.

Bottom line: I’m still waiting.

UPDATE: Verizon sent a letter in response to the FCC, which I’ll paste below, followed by my response in return.

Dear Mr. Ratcliffe:

In his most recent letter to you, Jeff Jarvis again alleges that Verizon Wireless is violating its C Block obligations by declining to activate Mr. Jarvis’s Google Nexus 7 LTE tablet on its network. Verizon Wireless takes seriously its C Block obligations, and, as explained previously, it is fully complying with them, including with respect to the device in question.

The Google Nexus 7 is a tablet developed by Google and manufactured by Asus. Asus initially submitted the device for our certification process in August. As previously explained, Verizon Wireless’s certification process provides a straightforward way to ensure that devices attached to the Verizon Wireless network do not harm the network or other users. This process is fully consistent with the Commission’s C Block rules, which recognize that a provider’s obligation to attach devices only applies in the case of devices that comply with the provider’s published technical standards.1

In the case of the Nexus 7, the certification process has worked as intended. During the certification process for this device, Google, Asus and Verizon uncovered a systems issue that required Google and Asus to undertake additional work with the Jelly Bean OS running on the device. Since Google was about to launch its new Kit Kat OS, rather than undertake this work, Google and Asus asked Verizon to suspend its certification process until Google’s new OS was available on the Nexus 7. So in this case, the straightforward process identified an issue that needed to be addressed, and addressed it in a collaborative and efficient way with the manufacturer and developer.

Verizon is committed to ensuring our customers have the best overall experience when any device becomes available on the nation’s most reliable network. Please let us know if you have any further questions on this matter.

My response:

Mr. Ratcliffe,

I would ask that the Commission seek from Verizon Wireless an explanation of what this “systems issue” is and an explanation of why this issue has not had any apparent impact on any of the many other LTE networks on which many Nexus 7s are running now. I would also ask that this exchange be made public. The Commission still needs to define “open” and its limits and whether this certification is justified.

I would further ask the Commission to examine the anticompetitive questions around Verizon’s delay in regards to the announcement of its own seven-inch LTE tablet in competition with Google’s.

Thank you for your continued attention. I look forward to your and the Commission’s response.

Opening design

Fred Wilson brags about his portfolio company, Buglabs, opening its redesign process with Ideo to the public — as well he should. Opening up makes sense especially for a company producing what is supposed to be open-source hardware. But it makes sense for any company in most any industry.

In What Would Google Do?, I argue that even automakers should open up design.

What if just one model from one brand were opened up to collaborative design? Once more, I don’t suggest that design should be a democracy. But shouldn’t design at least be a conversation? Designers can put their ideas on the web. Customers can make suggestions and discuss them. Designers can take the best ideas and adapt them, giving credit where it is due. I don’t imagine customers would collaborate on transmission or fuel- pump design—though a few might have great suggestions if given a chance. But they would have a lot to contribute on the passenger compartment, the look of the car, the features, and the options. They could even get involved in economic decisions: Would you be willing to give up power windows if it got you a less- expensive car or a nicer radio? This collaboration would invest customers in the product. It would build excitement. It would get the product talked about on the web and linked to and that would earn it Googlejuice. It could change the relationship of customers to the brand and that would change the brand itself. Imagine that: the collaborative community car—our car.

The entire chapter on on the Googlemobile is supposed to be run in Business Week later this month; I”ll link to it when it goes up.

I also argue in other chapters that there are many ways to open up. When Google puts out a beta – or when a journalist publishes an unfinished story and asks for help – it is a way to open up the design process.

Competing with open – and free

I’m writing a chunk of my book now about one of my favorite topics: how much I despise real-estate agents and how eagerly I await the doom of their business model. And it so happens that Saul Hansell just wrote a blog post about Zillow and its effort to open up the mortgage market by providing information while protecting customers from spam. There’s this nice quote at the end from founder Rich Barton:

The Internet is a great big race to free. Anyone who has built a business model with a price above free for something that can be free is in a tough strategic position.

Add that to the line from Umair Haque via Fred Wilson that I quoted just below and will repeat now:

Competitive advantage is fundamentally about making markets work less efficiently. One catastrophically effective way to do that is to hide and obscure information – to gain bargaining power relative to the guy on the other side of the table.

And add that to Chris Anderson’s Wired cover story on free as a business model.

Once a marketing gimmick, free has emerged as a full-fledged economy. Offering free music proved successful for Radiohead, Trent Reznor of Nine Inch Nails, and a swarm of other bands on MySpace that grasped the audience-building merits of zero. The fastest-growing parts of the gaming industry are ad-supported casual games online and free-to-try massively multiplayer online games. Virtually everything Google does is free to consumers, from Gmail to Picasa to GOOG-411.

The rise of “freeconomics” is being driven by the underlying technologies that power the Web. Just as Moore’s law dictates that a unit of processing power halves in price every 18 months, the price of bandwidth and storage is dropping even faster. Which is to say, the trend lines that determine the cost of doing business online all point the same way: to zero.

The fall of the firm

Fred Wilson just posted a response to one of Umair Haque’s microessays (aka blog posts) about the declining power — the crumbling, even — of the firm.

As Umair cogently notes:

Competitive advantage is fundamentally about making markets work less efficiently. One catastrophically effective way to do that is to hide and obscure information – to gain bargaining power relative to the guy on the other side of the table. . . .

Where orthodox strategy advises hiding information and making things less liquid, what does edge strategy advise? Exactly the opposite: release information bottlenecks and make things more liquid.

Go read their posts first. This was my response:

Fred,

Of course, corporations won’t end. But I believe they are being supplemented by a few models that are not about command-and-control at the center, as all old corporations were. They’re the obvious ones you know:

* Platforms. Take Google, of course. It is the anti-Yahoo, built on the distributed model of enabling countless companies to start atop what it provides. Yahoo, I’ve said, shouldn’t just break up into smaller pieces; it should make its entire self exportable and reusable. Ditto AOL. Ditto, for that matter, Microsoft. Amazon and Google are offering up their infrastructures as the bases for others’ companies and that’s smart. Pardon the plug for my book, but they should all be asking WWGD?

* Networks. A little less-loose than platforms; they come together to benefit from critical mass but do not join into a corporation; there is still ownership and control at the edges. I believe that Right Media is part of a larger trend toward open ad networks, for example; see OpenX and Google AdManager. Again: WWGD?

* Metaorganizations. That’s made-up but I want to encompass more than just open-source. This is the loosest affiliation: gathering around standards or standard-making efforts to gain some benefits of critical mass with all control and ownership at the edge.

As Google proves, though, this isn’t an either-or. A corporation can, as the examples above have shown, still be a corporation but scale much larger by creating a network, loose or tight, and adding as much value as possible while extracting as little value as possible while growing as big as possible. This is what I learned at your event from the likes of Yochai Benkler, Tom Evslin, Tim O’Reilly, Umair, and you. From the top view, size still has benefits so it still matters but there are now alternatives to size that also demands ownership and control. From the bottom-up view, enterprises at the edge will join whatever gives them the benefits of size — whether that’s building on a Google platform, or adhering to a Web standard, or selling on eBay, or using Amazon infrastructure, or joining an OpenX or other ad network. To quote Mark Potts from my conference on networked journalism at CUNY: To be small, you have to be part of something big.

The thing is, nobody can own big anymore. And that is what will keep big — the corporations and organizations of the future — more honest, I hope (but then, I’m an optimist). That control is what allowed them to corrupt.

How do you make money on this? I think you already are, by supporting companies that create platforms or take advantage of others’ platforms or standards. Are there more ways? Well, that’s an interesting conversation. Time for lunch. I do think that one could look at any of the industries Umair links to and complains about above and try to figure out what platforms would be needed to utterly disrupt them. Pardon the last plug, but that’s part of what I’m trying to do in the book. So I’ll buy lunch.

Google Ad Manager: It’s bigger than it looks

The biggest news of the week — well, besides the governor-erect (hat tip to the New York Post) — was not AOL’s purchase of Bebo or Yahoo’s embrace of the semantic web (about which I remain skeptical) or certainly Lacygate. No, the biggest, most game-changing news went by without a great deal of notice and that Google’s announcement of a free ad-serving platform.

Google Ad Manager is one critical piece in creating the open network of networks where any site can take any ad and any marketer can advertise on any site. When that day arrives, we all become atoms that can attract to one molecule or another, no longer locked into one network. We start to see a truer marketplace for online advertising. We also get to see small sites gather together in large, ad hoc networks to compete with big sites — and this, I believe, will encourage and support the creation of more small sites. God’s work. Or now Google’s.

The creation of a standard ad call — which any site can use and into which any advertiser can place an ad, which in essence is what Google is doing — is the foundation of what I envisioned when I called for an open-source ad infrastructure.

There’s just one issue: It’s not open-source. And it’s Google’s.

Google’s benefits are clear: By offering free ad-serving to sites, it has an opening to be on many more sites, and when they don’t have ads of their own to serve, Google can serve AdSense and make some more money. Google also gathers incredible data about ad performance and pricing and about the sites themselves. One big problem with its program is that it doesn’t share that data with the publishers and let them use it to more efficiently serve its ads. It also doesn’t share it with advertisers and let them take advantage of a more transparent marketplace.

No, Google’s holding onto that information itself and, once again, becoming smarter than all of us. And I say that’s our own damned fault for not building our truly open ad marketplace. It’s not too late, but it soon will be.

The closest thing we have to an infrastructure for such an open marketplace is OpenX (nee Openads, nee phpAds), a free and open-source ad platform now serving ads on 30,000 sites. What’s needed — and I told CEO James Bilefeld this when I met him sometime ago — is that all those separate sites should be tied together into an open network so advertisers can pick and choose where to place their ads. The other thing it needs is standard metrics so advertisers can decide where to buy.

Now Google promises to build that cross-internet ad network with Ad Manager. And Google has the metrics — only, again, it’s not sharing. It lets sites target ads on the most basic of criteria: geography, bandwidth, browser, browser language, operating system, and domain. Whoop-dee-do. Each site can use its own information to target. But it’s the cross-site information that is exponentially richer and it’s Google that sits in the catbird seat where that is visible.

We should be able to target on so much richer information: the cross-site behavior of users (that’s the basis of Tacoda, just bought by AOL); their influence (that’s part of the sauce cooking up at 33 Across, where — full disclosure — I am an adviser and investor); their place in the timing of a conversation (meme starters, meme spreaders); their own characteristics (what do the demographics of authors tell us apart from the demographics of audience?); their authority (too bad Technorati never found a way to exploit that for bloggers’ benefit); and so on. This is about moving beyond eyeballs to brains.

But I wonder whether entrepreneurs will be able to start building some of this structure atop Google’s Ad Manager: analytics companies finding the ultimate network of soccer moms; ad agencies or media companies putting together ad hoc networks. This will create greater efficiency and thus greater value. And it will tie together a distributed community of interest into a critical mass advertisers will pay attention to: the mass of niches. And that, again, will support the creation of a new wealth of content and communication; that’s what I want to see.

On a less momentous scale, the Google move also reduces the cost of serving ads to zero and that will have benefit for sites of any size. When I worked on sites that were DoubleClick clients (which will still charge for serving as it becomes part of Google… for now) it was too expensive to serve even our own promotional ads because we had to pay DoubleClick to do it. Now sites can use their ad inventory in new and more creative ways. That, too, is a benefit of Ad Manager.

Altogether, Google is simply doing what Google does: creating a platform. That benefits all its users and it benefits Google by putting it at the center of the market. But the more closed that market is, the more it benefits Google over the users. And the more Google becomes the sole standard, the more it can successfully make it closed. So if we’re going to create an open ad marketplace, now’s the time. If it’s not already too late.