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Comments from Frankston, Reed, and Friends

Wednesday, June 05, 2002

DanB at 6:03 PM [url]:

Small Players Matter

While large players and big media companies act like they are the main reason for the web and Internet and therefore should drive policy decisions, the numbers show that the contributions of the myriad of small players -- individuals, non-profits, and small businesses -- are crucial to the vitality of the web and its value to people. I wrote an essay where I look at numbers from Overture.com and Nielsen/Netratings. For example: "The term 'Bed and Breakfast' at 145K [search queries] is more popular than Jennifer 'Rachel' Aniston of the hit TV show 'Friends' or her movie-star husband Brad Pitt (136K and 131K, respectively). 'Lawyer' (117K) is just a little less popular than 'teen sex' (200K)...Out of hundreds of millions or billions of queries processed by Overture each month, even 'sex' seems unpopular since it's part of only 3.4 million requests. Of course, even the 'popular' terms are often used to find web pages created by regular people and small businesses. If Disney or Yahoo! had all you wanted, why would you need Google?"

The essay is "Small Players Matter" on my Bricklin.com web site.

Monday, June 03, 2002

BobF at 5:22 PM [url]:

When More Means More

A very simple idea - if I want to buy more, I get more and it costs less.

This is the essence of Gordon Moore's law but the real power comes from the ability to drive the process from the edges by small incremental purchases that feed the virtuous cycle of demand creating supply and supply generating demand.

"More means More" (Frankston's law?) applies to connectivity for the same reason that it applies to computers. The only limit on capacity is willingness to take advantage of obvious ways to increase the capacity right now and the imagination to continue to find new ways. After all, DSL was created when the telephone companies wanted to create capacity so they could compete with the cable TV industry. And that was only the first factor of 100, just a tiny step compared to what we've seen everywhere else in computing and the Internet. Simply placing electronics along the bundle of wires and treating the bundle as a whole greatly extends the capacity and the range for very little cost.

This means we can start the process by asking for a little more capacity and getting a little more with incremental investments driving the process and that means that users can drive the process locally.

If we apply this test to today's telecommunications infrastructure we fail. We can't get incremental capacity on a cable that is only run as a shared broadcast medium - each set top box gets the same channels and the cable modems just get smaller slices of the same pie. There is no longer the incentive to increase the capacity of copper wires or fibers. Instead we create rules that focus on doling out scarcity. This serves the needs of those who only know how to dole out scarcity while it gives the illusion that we are making progress.

It's reminds me the time when we went out for breakfast (after programming through the night) and were told that the diner was out of French toast. But as with connectivity, what they were really out of was imagination. We increased the cook's capacity by teaching him how to create French toast using his existing infrastructure (bread and eggs).

The current telecommunications companies are like that cook. They claim they don't know how to provide more connectivity. After all, what is their incentive to try when they can charge more for providing less. It is ironic that these services are called "value-added" services when the value comes from taking away capacity so it could be sold back at a higher price.

We can "teach" how to provide more capacity by simply aligning incentives. Companies whose only business is providing more capacity will be able to take advantage of the many opportunities available. This requires a structural change so that the companies that provide the transport do not benefit from limiting capacity.

For more, see the Archive.

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