By Peter Nowak - Thursday, September 27, 2012 - 0 Comments
I was hoping not to write anything more about the iPhone after the flurry of activity last week, but one thing about the device – not just the new iPhone 5 model that sold more than five million units over the weekend, but all versions – still bugs me. The price.
As we learned in the patent case against Samsung, Apple is making a huge profit on the iPhone. According to court documents, the margin is double on what the company earns on the iPad. As Reuters puts it:
Apple Inc earned gross margins of 49 to 58 percent on its U.S. iPhone sales between April 2010 and the end of March 2012.
Between October 2010 and the end of March 2012, Apple had gross margins of 23 to 32 percent on its U.S. iPad sales, which generated revenue of more than $13 billion for Apple, the filing said. Apple does not typically disclose profit margins on individual products.
As I wrote recently, the reason Apple makes so much more on the iPhone is because it isn’t really selling the devices to consumers, it’s selling them to wireless carriers. The carriers turn around and sell the phones at a discounted rate in exchange for the subscriber signing on to a contract. In Canada, this inevitably means a three-year commitment.
By Peter Nowak - Friday, September 21, 2012 at 10:05 AM - 0 Comments
There’s a war going on for control of the world, in a figurative sense. We’re not talking about nation versus nation or a clash of ideologies (okay, on that one, maybe we are). We’re talking about Google versus Apple. More specifically, the maps that each company serves up on their respective smartphones—the applications that literally guide us around the world in our daily lives.
As almost every iPhone 5 reviewer has noted, including yours truly, Apple’s new device—which goes on sale today—is amazing in almost every way, with maps being a notable exception. For reasons no one is sure of yet, Apple has ditched Google-supplied data and is instead building its app using information supplied by GPS maker TomTom and a few other sources.
So, if you buy an iPhone 5 or new iPod that runs the latest software, iOS 6, or if you download that iOS 6 onto an older iPhone, iPod or iPad, you’ll get the new maps app. If you refrain from updating to the new software, you’ll keep the older version. For how long is another unknown.
App developers have noted that the foundation of Apple’s new maps system is actually quite good, it’s just lacking in data. As I mentioned in my review, there are some glaring omissions. The maps of Toronto, for example, show streetcar stops, but some subway stations are missing. It’s also given me faulty directions and locations on several occasions. And we all know that going to the wrong place because your GPS told you to go there is just about the worst thing ever.
By Peter Nowak - Thursday, September 20, 2012 at 9:45 AM - 0 Comments
The other day, a friend asked me whether he should buy the new iPhone 5. By virtue of writing about technology and gadgets for a living, it’s a question I get all the time – not necessarily about the new iPhone, but friends generally wanting advice on what smartphone they should get.
There’s never a simple answer, since every person’s needs are different. And it’s not just the device itself that matters, the carriers that offer them also factor into such a decision. My response is therefore always a flurry of questions in return: do you like physical keyboards, what kind of computer do you use, do you want to surf the web a lot, how much do you want to spend, do you travel a lot? Oh, and what are your politics? More on that last one in a second.
From there, we winnow down the options. If the buyer is on a budget, we’ll generally talk Android phones. If they don’t leave their home city much, we’ll discuss discount carriers such as Wind and Mobilicity. If a keyboard is a must, then it’s on to BlackBerry.
By Peter Nowak - Tuesday, September 18, 2012 at 9:00 AM - 0 Comments
I don’t know about you, but every time I exceed my monthly Internet limit and get a hefty bill, I feel like my human rights are being violated.
On Wednesday, Netflix chief content officer Ted Sarandos was talking about Canadian Internet providers and the low monthly usage limits they give customers at the Merrill Lynch Media, Communications & Entertainment conference in Los Angeles. Here’s how he responded when asked if Netflix’s mediocre content offering in Canada was limiting the company’s growth here:
Viewing hours are almost… are very similar [in Canada] to the US. The problem in Canada is not content, the problem in Canada, which is one of our strongest markets, is they have almost third world access to the internet. Not because it’s constrained for any reason except for money. They have very low datacaps with all the broadband providers in Canada and they charge an enormous amount if you go over your broadband cap. It made us be much more innovative about compression and delivery technology so we are less broadband consumptive in Canada… It’s almost a human rights violation what they charge for internet access in Canada.
The comments took me aback when I first read them. I’m usually the first in line to point out Canada’s broadband shortcomings, but Sarandos seemed to be taking it over the top. Human rights violations? Come on. Perhaps Netflix executives should do some time in Guantanamo or try out some water boarding before they throw such accusations around.
Is expensive Internet a bad thing? Absolutely. Is it a human rights violation. Not really.
And yes, Netflix’s Canadian offerings are quite crappy. Amazingly, that hasn’t stopped the service from growing quickly here. At least 10 per cent of Canadians are subscribing while one analyst believes that number to be closer to 17 per cent.
Hyperbole aside, I wondered if there was anything to Sarandos’ comments, particularly in regards to “third-world” Internet access. I figured I’d check the numbers again.
By Peter Nowak - Thursday, September 13, 2012 at 2:37 PM - 0 Comments
If you thought ebooks were growing quickly, then you—as the saying goes—ain’t seen nothing yet. A confluence of factors set in motion last week are likely to push ebook sales from explosive to exponential.
First up there was the Department of Justice’s settlement with Hachette, HarperCollins and Simon & Schuster, wherein the three publishers were found to have participated in “a conspiracy to raise, fix, and stabilize the retail price for newly-released and bestselling trade e-books, to end retail price competition among trade e-books retailers, and to limit retail price competition.”
A judge last week approved the settlement, which will prevent the three publishers from agreeing to any sort of contract with an e-book retailer that lets them set prices for two years. The companies will also not be allowed to enter into “most-favoured nation” deals, which guarantee a certain retailer the best price on their goods, for five years.
Apple and two publishers, Penguin and Macmillan, are holding out and saying that their “agency pricing” deal was designed to counter Amazon’s growing power and therefore make the ebook market more competitive, not less. The fight will continue, but ebooks from the three publishers who settled are expected to take a nose dive. A return to Amazon’s $9.99 price point is a veritable certainty, while the fact that ebook prices rose in general once Apple entered the market seems like a pretty damning fact in general.
By Peter Nowak - Friday, September 7, 2012 at 10:00 AM - 0 Comments
Last week’s post about how the budgets for television shows may need to go down in order to adapt to the internet sparked some interesting discussion over on Twitter. The discussion involved films, of course, with one commenter suggesting that A-list actors such as Tom Cruise command huge salaries because they’re proven draws.
That got me thinking: do movie executives really cast their movies based on the drawing power of the actors? Of course they used to, so the better question is perhaps whether they still do? And if so, is it possible to play games with such a system, similar to how baseball manager Billy Beane played “Moneyball” with the Oakland Athletics?
Surely I’m not the first person to have thought of this – it would actually only surprise me if this sort of thing wasn’t widespread in Hollywood.
Beane’s Moneyball strategy, for the uninitiated, was a system of picking players based on non-traditional statistics. For much of its history, Major League Baseball has aligned the value of its players according to traditional stats, like batting average, home runs, stolen bases, earned run average and so on. If one guy consistently hits .300 and 40 home runs, then he’s an all-star who should make big bucks, or so the system has gone.
Beane, however, didn’t have those big bucks to spend with the A’s, so he instead focused on what he felt were more important statistics, such as on-base average and slugging percentage. After all, it doesn’t really matter how a player gets on base – whether it’s through a hit, a walk or even hit by a pitch – because once he’s there, he has the same chance to score a run as a good hitter, which is the only thing that matters in a game that’s decided by one team outscoring the other.
As dramatized in the Brad Pitt film, Beane put together a successful team based on his stats that had no bona fide all-stars, just players who put together solid numbers but were paid modestly. The “Moneyball” strategy has of course had a big effect on baseball since, with many teams now employing statisticians that study such numbers.
The logic seems to apply to movies as well. Over the past year, Tom Cruise was again the highest paid actor, according to Forbes. The illuminating part, however, comes from looking at the magazine’s most overpaid actors list, which calculates the revenue from their last three films against salaries. Right there at ninth most overpaid is Cruise, whose movies earn $6.35 for every dollar he’s paid.
Contrast that with the most profitable actor, Kristen Stewart, whose movies (which have basically been Twilightfilms, so far) earn $55.83 for ever dollar she’s paid.
The two lists are quite obvious when compared. The overpaid list includes established, big A-listers including Cruise’s ex-wife Nicole Kidman and comedians such as Adam Sandler, Will Ferrell and Eddie Murphy. The most profitable list, meanwhile, is made up mostly of young actors such as Stewart’s co-star Robert Pattinson, Daniel Radcliffe and Shia Labeouf.
The major flaw with Forbes’ process is equally obvious when the types of movies the actors star in are considered. People go to see comedies based on the actor/comedian, while not many go to big event movies like Transformers to see Labeouf. Comedy actors thus probably merit higher pay while their movies earn less than blockbusters, which pay their stars relatively little. This skew explains much of the two lists.
Still, the inclusion of dramatic actors such as Cruise and Kidman on the overpaid list does lend credence to the fact that paying an actor large amounts of money to star in a movie is pretty risky, if not foolish. From a financial perspective, it would seem to make more sense to play Moneyball with actors. As long as it’s not a movie that’s completely dependent on the actor’s personality, young players consistently deliver a better bang for the buck.
By Peter Nowak - Tuesday, September 4, 2012 at 11:16 AM - 0 Comments
As numerous analysts have pointed out, this week could make or break Nokia as it shows off its new Windows Phone 8 devices at a press event in New York. “Make” is actually a strong word – “stave off death” is probably more appropriate.
The storied Finnish cellphone maker, in partnership with Microsoft, is benefiting from some good timing in light of the big setback handed to Samsung by a court two weeks ago. With the court siding with Apple in that epic patent dispute, Samsung and other phone manufacturers using Google’s Android operating system are likely to be slowed down in the near term, at least in the all-important U.S. market.
That gives Nokia, which essentially put all of its eggs into Microsoft’s basket last year, a window of opportunity. Wireless carriers are now especially inclined to push Windows phones, to prevent Apple and perhaps even Android from gaining too much power over them.
So far though, Nokia and Microsoft have failed to spark the imaginations of the buying public. Windows phones, despite promising a very different experience from iPhone and Android devices, have captured less than 4 per cent of the global market, according to Strategy Analytics. That’s compared to 17 and 68 per cent respectively for Apple and Google. (BlackBerry, by the way, has plummeted to just 6 per cent, according to IDC.)
By Peter Nowak - Monday, September 3, 2012 at 10:53 AM - 0 Comments
According to GigaOm, the return of Arrested Development could change how television is made. The cult comedy, if you hadn’t heard, is being resurrected for a fourth season and will be shown exclusively on Netflix.
The subscription video streaming service, believing the revived show will serve as a major magnet for new subscribers, reportedly outbid a number of other big players for the rights to it, including pay TV provider Showtime. If the gamble pays off for Netflix, “it’ll legitimize a whole new distribution platform and business model,” according to GigaOm’s story.
A lot of people are hoping this does indeed happen. With cable prices climbing through the roof, consumers are dying for an alternative (and legal) way of getting access to their favourite shows. Pay-per-download services such as iTunes are great, but so far they’ve simply been a complement to the existing system. Netflix’s scheme is an effort to introduce entirely new production and distribution options for TV show creators, which could ultimately benefit viewers.
What struck me about the whole situation is just how expensive many TV shows are. While we don’t know how much Arrested Development will cost to make, we do know the budgets for shows such as Breaking Bad and Fringe are around $3 million to $4 million per episode. More elaborate series set in fantasy worlds, like Game of Thrones for example, cost upward of $6 million.
By Peter Nowak - Wednesday, August 29, 2012 at 1:57 PM - 0 Comments
There was a ton of commentary over the weekend on what happens after Apple’s $1 billion win over Samsung, with the likeliest scenario being that the latter appeals. But should the verdict stand, the biggest effect will be on Android phones overall. Apple’s victory could send a temporary chill through the market, with all manufacturers – not just Samsung – giving second thoughts to their Android devices. After all, no one is going to risk releasing a device that has a good chance of getting them sued. Google may have to work some fundamental redesigns into its operating system to avoid this sort of thing happening again, while manufacturers themselves will have to make sure their actual designs are clearly distinct from Apple products.
The more likely scenario is that Android phone makers will have to pay Apple a license fee on the patents. Earlier this year, the company reportedly offered these manufacturers a deal that would have seen them paybetween $5 and $15 on each device. Given the big court win, such a fee could be expected to come in on the high end now. Some critics have said this is going to result in more expensive phones. While that’s true, adding $15 or so to the cost is not going to break anybody’s bank.
Of course, that’s assuming Apple is actually willing to license its technology. If Steve Jobs, who told his biographer in no uncertain terms that he wanted to destroy Android, were still alive, it would be a safe bet that no licensing deals would be offered. This is a company that has resisted licensing its Macintosh operating system for much of its existence, after all. If Jobs’ successors take the same approach, it could indeed be back to the drawing board for Google and its Android partners.
By Peter Nowak - Thursday, August 23, 2012 at 6:16 PM - 0 Comments
Regular readers know of my absolute disdain for Auto-Tune, the technological filter applied to so much modern music that confers otherwise talentless individuals with the illusion of being able to sing. Similarly, I’m also pretty upfront about my love for fast food, horrible bacon sundaes and all.
On those rare occasions when someone is able to apply the latter to the former, I can’t help but soften on my hatred for technologically enhanced vocals. The video below, is a case in point.
The original clip was posted by YouTube user Daym Drops, who reviews fast food as a hobby (sounds familiar). It turns out his rant about how much he loves Five Guys Burgers (also sounds familiar) was remixed by the Gregory Brothers, the musical group perhaps most famous for creating Auto-Tune the News. The video has now turned into a viral hit, and it’s easy to see why:
By Peter Nowak - Tuesday, August 14, 2012 at 1:23 PM - 0 Comments
Back when I was working on my chatbot story for New Scientist magazine, futurist and Chatbots.org founder Erwin Van Lun shared with me some fascinating prediction for the future of the Internet. With anonymity enabling such things as annoying comments on news stories at one extreme and chatbot scams and terrorism organization at the other, Van Lun believes we’re moving toward a world where everyone will have to prove their identity to get on the Internet in the first place.
“Governments are responsible for citizens and issue them passports to travel the world, they should also say ‘we are responsible for your behaviour on the Internet, so we will issue you an Internet passport’, ” he says. “That’s where it’s heading to.”
It’s an intriguing premise that is sure to rile free speech advocates – and to be sure, there are many good reasons to preserve online anonymity – but it does look like things are heading that way. YouTube, a cesspool of anonymous troll commentary, was just the latest recently to make the move toward using real names.
By Peter Nowak - Monday, July 30, 2012 at 10:04 AM - 0 Comments
There was a time, not so long ago, when Google was the internet activist’s best friend. Through much of its first decade of existence, the search engine company presented itself as a different kind of company, one that cared about changing the world for the better first and making money second, an ethos exemplified through its famous “don’t be evil” motto.
It wasn’t just empty words; Google talked the talk too. The search company was one of the most vocal supporters of net neutrality and openness in wireless, going so far as to bid billions of dollars to ensure that people could use whatever devices and apps they wanted on whatever networks they wanted.
But in recent years, something changed. The company compromised in the fight for net neutrality by partnering with wireless carrier Verizon. While the move was seen as prudent by some, others thought it was a betrayal; that Google’s desire to get wireless carriers to support its Android phones led it to become a “surrender monkey,” a charge that irked some of the company’s principals.
Since then, Google has been shoveling increasing amounts of money into government lobbying, but has been notably quieter in the public domain on such issues. It did speak up on the Stop Online Piracy Act earlier this year, but for the most part Google has been focusing its public muscle on un-controversial projects like augmented reality glasses and robot cars.
Simmering in the background for the past two years, however, has been a plan to build a super-fast broadband network that would really put Google’s money where its mouth is. The idea, when it was unveiled in 2010, was to create a fiber network capable of gigabit speeds–or at least 100 times faster than what’s on offer anywhere in North America–at a reasonable cost with unlimited usage. The company kicked off a sweepstakes between U.S. cities and towns by promising to bring this cutting-edge broadband to them.
By Peter Nowak - Monday, July 16, 2012 at 11:55 AM - 0 Comments
If there’s one fact that crystallized a little more last week, it’s that the video game industry is set for some major disruption. Ouya, an Android-running set-top box that is looking for investment via crowd-sourced funding site Kickstarter, made a big splash on Tuesday. The attention came partly because Kickstarter projects are all the rage these days, but also because there is a definite appetite for just the sort of disruption Ouya is promising. The fact that the effort hit its $1million funding goal in no time indicates just how badly the gaming public wants something new.
The frustration was most effectively articulated by Destructoid reviews editor Jim Sterling in his latest video rant, which he posted a day before Ouya hit Kickstarter. To summarize, Sterling thinks video game consoles – primarily the Xbox 360 and PlayStation 3 – have become “crap PCs” that ultimately defeat their entire purpose. Virtually every console game now requires multiple log-ins, upfront installation, frequent downloadable updates and complicated – and annoying – digital rights management that limits how the game and its assorted content can be used. Whereas once upon a time a person could pop a disc (or cartridge) into the machine and be off to the races in seconds, now there’s a whole slew of hoops to jump through before the action starts.
By Peter Nowak - Monday, July 9, 2012 at 10:27 AM - 0 Comments
Oh sure, we like to joke about how modern pop stars are robots, merely carrying out pre-programmed actions and singing computerized songs that are guaranteed to sell thanks to the algorithms that write them. But we were only, kidding, right?
Nope. It looks like South Korean robot makers are going to have the last laugh after all. Dongbu Robot says it is going to launch robots this year that impersonate K-pop stars such as Girls Generation and Super Junior. The robots will be able to re-enact the actual stars’ dances and movements through more than 20 motor joints throughout their bodies and will have realistic artificial skin, according to the company.
What’s more, users will be able to download new songs into the robot and watch them perform. It’s Guitar Hero on a whole other level.
By Peter Nowak - Tuesday, June 12, 2012 at 1:30 PM - 0 Comments
As someone who is deeply intrigued by the prospect of an Apple-produced television set, I was somewhat disappointed by Monday’s kickoff to the company’s annual Worldwide Developer Conference. That’s not to say, however, that a ton of interesting stuff didn’t come out of chief executive Tim Cook’s keynote.
The most important news, I thought, was the official unveiling of Apple’s own Maps app for iOS devices. The new app will be included in the iOS 6 update when it becomes available this fall. It’s not yet clear how good the app is or whether it will completely supplant the existing Google Maps used on iPhones, iPads and iPods, but it’s pretty clear Apple is looking to cut the final strings tying it to its former ally.
As I wrote in an analysis piece for The Globe and Mail, that’s a good move now that the companies are bitter smartphone and tablet enemies. Creating its own core Maps function will allow developers to better integrate their apps with Apple products, which will only increase their reasons to keep creating for Apple as opposed to other smartphone vendors.
Siri was also a big star of the day, with the voice assistant soon expanding onto the iPad, into other countries – including full Canadian functionality – and even into cars. The growing trend of computing control beyond the mouse and keyboard was the subject of another analytical piece I penned for the CBC.
One other observation I’d make is that the new computer operating system, Mountain Lion, and respective mobile software – iOS 6 – may be the last two independent OSes we see from Apple. Many of Mountain Lion’s new functions, including swipe controls but also notifications and alerts, seem borrowed from iOS, to the point where Mac computers are increasingly looking like iPads.
Apple also announced cross-platform support between Macs and iOS devices. In other words, you can play a video game on your iPad, but your opponent may actually be playing on a Mac. It doesn’t matter because it’s the same experience.
This merging makes all sorts of sense since it makes it easier on app developers. If they only have to create software once and then it works on all of Apple’s devices, that’s obviously much better than having to do it twice. It’s the same idea Microsoft is working toward with Windows 8, which looks like it could provide the same experience on computers, tablets and phones. The benefits to end users are also obvious – not only will documents look the same regardless of device, so too will games and other content.
The previous Mac OS, Lion, was released last July, while iOS 5 came out in October. Could the next release of both operating systems be combined next year into one unified beast? There are a lot of people who hope so.
By Peter Nowak - Sunday, June 10, 2012 at 9:00 AM - 0 Comments
With the Electronic Entertainment Expo in Los Angeles over and done (more thoughts on the show soon, but in the meantime check out my top 10 games of the show), I’m off to San Francisco for Apple’s annual
What’s in store? As usual, the rumour mill is in full blow. This particular event, however, is shaping up to be a little more predictable.
As its name implies, WWDC is aimed at developers. It’s where Apple shows off the latest tweaks to its operating systems so that the people who create software and apps for them know where things are going. As such, it’s likely that iOS 6, which will power iPhones and iPads, will be the star of the show. Mountain Lion, the next iteration of Apple’s OS for desktops and laptops, will also figure prominently.
A few dribs and drabs from the rumour mill are also likely. Expectations are high that Apple is going to move on erasing Google Maps from its devices with its own replacement. There’s also a good likelihood that the Retina display functionality from the past two iPhones and latest iPad will find itself on Macs. I, for one, hope so, given that my photos are looking better on my mobile devices than on my computer, which just seems wrong.
WWDC has also played host to a number of hardware launches in the past, particularly computers. It’s almost a given that there’ll be new Macs, but some analysts also think a new iPhone is in the offing. It seems unlikely since the iPhone 4S only launched in October, but then again, anything is possible.
The biggest question is whether Apple will share any details on its television project. Chief executive Tim Cook recently said in an on-stage interview that TV is an area of “intense focus.” For a company that manages its message so carefully and strategically, that was no accident. I’d be surprised if there isn’t some mention of the iTV at WWDC, perhaps even an introduction of a software developer kit for app makers.
Whatever happens, I’ll be there to check it out and report back any hands-on impressions. I’ll be posting updates on Twitter and here after the event.
By Peter Nowak - Thursday, June 7, 2012 at 11:05 AM - 0 Comments
Have you ever wondered why people share so much information about themselves on things like Facebook and Twitter? Have you ever thought about how all of that data might be used in the bigger picture? Have you ever wondered whether all of that stuff might actually be worth more than just free access to a site that lets you share photos?
Nora Young, host of the CBC radio program Spark (which I sometimes contribute to), tackles all of these topics and more in her new book The Virtual Self: How Our Digital Lives Are Altering the World Around Us. It’s a great read that provides a good deal of food for thought in regards to why we engage in all this self-tracking, and what it all might mean as it develops further.
I had a long chat with Nora last week about her book:
By Peter Nowak - Friday, June 1, 2012 at 2:01 PM - 0 Comments
The other night, I had the pleasure of having dinner with Vivek Kundra, a big name in technology circles by virtue of his being the first ever Federal Chief Information Officer of the United States. Appointed to the position in 2009 by President Barack Obama, his job was to overhaul how the government spends money on technology, a task he did until departing last summer.
Kundra talked at length about how he believes social networks such as Facebook and Twitter are enabling big and meaningful change in the world, from the protests of the Arab Spring to Occupy Wall Street to even Netflix. Social media, he said, has driven all of those phenomena–in the case of Netflix, it was people convincing the company not to spin off its DVD business.
He went further, saying that the current social media upheaval is much more important–from a humanitarian standpoint–than previous technological paradigm shifts, namely mainframe to PC to Internet.
“Social is the only revolution out of all the tech revolutions that is actually changing society, that bleeds into our social fabric,” he said. “Governments are unprepared because they don’t know how to thrive in the social era. Corporations are also all trying to figure out what to do.”
By Peter Nowak - Wednesday, May 30, 2012 at 1:09 PM - 0 Comments
One of the things I always try to do at the Consumer Electronics Show is take stock of the Canadian companies at the annual Las Vegas techno-circus. Aside from BlackBerry maker Research In Motion, that usually means talking to startups.
At this year’s show, one of the more interesting startups I encountered was SurfEasy, a new Toronto-based outfit aiming to make web surfing more private through a USB key that plugs in to your computer. The company recently started shipping its product and I finally had a chance to review it.
The best part of the SurfEasy key is just that – it’s easy. It’s a thin USB stick that comes in a plastic credit-card-like holder. You plug it in and it immediately launches a quick registration window, where you input your email address and a password. From there, a brief tutorial shows you how to use it and then you’re off to the races.
The SurfEasy browser is based on Mozilla, so it looks and feels similar to Firefox. A blue panel on the top right tells you that the site you’re on is encrypted. All of the browser’s traffic flows through a virtual private network connection to SurfEasy with the same level of security encryption as banks use, according to the company. That means no one – not your ISP, Google or the government – can snoop on what you’re doing. Indeed, the Google search bar shows up on SurfEasy’s default home page, but it can only track your location by city rather than by your individual IP address. Even that level of identification can be turned off, if you choose.
By Peter Nowak - Friday, May 25, 2012 at 11:39 AM - 0 Comments
When it comes to broadband Internet, it seems like you can always count on regulators to turn a positive into a negative. Such was the case earlier this week when the U.S.’s Federal Communications Chairman Julius Genachowski defended so-called tiered pricing by internet providers–known in these northern climes as usage-based billing–as worthwhile efforts in fighting network congestion.
Critics in the U.S. quickly jumped on Genachowski for swallowing the industry’s excuses for shrinking caps, which was ironic given that his comments came only days after Comcast–the country’s largest cable provider–announced it was raising or doing away with its limits.
Up here in Canada, the reaction was similarly negative. York University professor David Ellis pointedly noted that Genachowski, who was once admired for his supposed progressiveness on Internet issues, has now apparently been suckered by the same fallacious reasoning our own regulators were once (and might possibly still be) enamoured with.
It’s a cliche that Canada might as well exist in a bubble, particularly technologically, as far as the U.S. is concerned because Genachowski should have looked north, where this topic has been debated ad nauseum, before making such a foolish proclamation. As Ellis points out, caps-as-congestion-fighters is an argument that has been largely discredited here. Too bad nobody told the Americans.
That said, I’m still wondering why many Canadians have such ridiculously low caps compared to Americans (typical plans on Bell and Rogers offer 60 to 70 gigabytes, compared to 300 or more on Comcast and the like). I put the question to Steve Anderson, head of activist group Open Media, and we ended up having a bit of a back-and-forth over email.
He said the reasons why Canadians are still paying too much for Internet services boils down to the following:
We only stopped things from getting worse with UBB – and now we’re only starting to actually fix the market – it’s a slow process. The government has completely failed to do anything to encourage next generation broadband. Other countries like the U.S. are investing I think like $100 billion. Here’s a bunch of other things they could be doing. [Network owners] repeatedly make it difficult for indies to deliver services.
Anderson also advocates patience with regulators, who are starting to come around:
I’m frustrated that we’re not really moving forward more quickly here in Canada. That said I actually think the CRTC is doing a reasonable job as of late – the state of the market developed over decades and it will take some time and multiple good decisions to fix it. I actually think the UBB decision was mostly good. They got the model right and costing wrong. The indies have survived and Distributel actually moved in to Quebec to offer serious competition to Bell and Videotron etc.. When they did so they explicitly cited the UBB decision for enabling them (they sent a letter to the CRTC to thank them). Also, more importantly – when the decision came in our main issue was that the costing was off and that they needed to start a transparent process to get at what the costs should be. The CRTC actually listened and is holding a consultation to considering that matter now… I think we need to be encouraging not slamming the CRTC right now.
I suggested that perhaps Open Media was being too Canadian, as in too polite. With Americans screaming bloody murder about their 300 GB caps, shouldn’t Canadians–and Open Media by extension–be more vocal in their opposition?
Anderson doesn’t think Canadians or Open Media are apathetic, but they’ve quieted down somewhat because there is positive movement in the right direction:
The CRTC really has taken a positive turn, and I think it’s just smart to give them space to do good things. If I just piss in their face even when they start moving in the right direction then I don’t carry much weight later when they fuck up… When the CRTC messes up, or the telecoms do something to create an inflection point – the outcry will happen again… If you look [at] the campaigns about internet issues we’ve run in the last year and a half it’s amazing how many people are active on these things. I actually think we have the most robust pro-internet movement in the world. Groups in the US and UK are copying our campaigns, and not the parts Open Media dreams up, the parts like #tellVicEverything that creative pro-internet [people] came up with after we raised the alarm. It’s inspiring to watch the EFF try to use that with CISPA and UK with their own issues.
One other issue we touched on was structural separation, one of my favourite topics. In some countries, governments have forced telecom giants to spin off their network operations into completely separate companies. Those companies then sell access to the network to all comers on equal terms, with the idea being that no one ISP is unfairly advantaged. Each is free to compete on items such as price, speed and service.
Anderson says the CRTC is starting to seriously listen to Open Media’s suggestions that such a system should be implemented in Canada. But with incumbent companies fighting like hell to avoid structural separation in countries where there’s just one of them, I retorted by suggesting this is a pipe dream in Canada. With the combined lobbying power of a whole host of big cable and phone companies, there’s no way it’ll happen.
On that, Anderson capitulated somewhat.
“I still think it’s still worth raising separation,” he said. “It’s wise to ask for more than you think you can get.”
By Peter Nowak - Friday, May 18, 2012 at 2:03 PM - 0 Comments
An op-ed piece on broadband caps over on Ars Technica caught my attention over the weekend. In it, Technology Policy Institute vice-president and senior fellow Scott Wallsten argued that caps aren’t perfect, but that’s okay.
Wallsten wrote that the arguments against broadband usage caps–based as they are on the fact that data is incredibly cheap and continually dropping in price–are fallacious because they don’t take into account basic economic principles. He argued:
By Peter Nowak - Thursday, May 17, 2012 at 12:35 PM - 0 Comments
If Facebook were a fictional movie character, it would have to be Rocky Balboa. Like Sylvester Stallone’s underdog boxer, Facebook routinely gets its figurative face punched in, but somehow keeps on going. Whatever you think of the social-networking service, on the eve of its initial public offering–expected to be the largest ever for a U.S. tech company–it’s hard not to admire the company’s ability to roll with the punches.
Facebook has repeatedly sparred with watchdogs and users alike over its constantly changing privacy settings. Canada actually led the way, with Privacy Commissioner Jennifer Stoddart giving the web service a good spanking back in 2009, with other countries following suit. Even before that, the company caught heavy flak for its Beacon effort, an ad platform that displayed on Facebook users’ activity on other websites.
By Peter Nowak - Monday, May 14, 2012 at 2:10 PM - 0 Comments
If you haven’t read a good dystopian tale like George Orwell’s 1984 lately, have a look at a new study on usage-based Internet billing from Microsoft and a couple of professors from the Georgia Institute of Technology.
The report tells of a number of families in South Africa that took part in the study, which sought to understand how the caps on monthly home broadband plans affected Internet usage. It’s bone-chilling stuff.
In South Africa, broadband speeds are still relatively slow, hitting a maximum of four megabits per second as of the study’s purview (2010). Usage caps, meanwhile, typically came in at between one and nine gigabytes per month, with unlimited plans only recently surfacing.
By Peter Nowak - Friday, May 11, 2012 at 2:48 PM - 0 Comments
I had a great chat with Russ Grandinetti, the vice-president of Kindle content for Amazon, last week. We covered a bunch of topics, so I thought I’d share some of that here.
As an author, I was naturally self-interested in Amazon’s Kindle Direct Publishing program, which lets writers self-publish and sell their own e-books through the company’s apps and devices. It seems like not a week goes by without some new story about a self-published author achieving great success this way. I can’t wait to try it myself and indeed plan to with my next book, in some markets at least.
With Amazon putting increasing effort into its self-publishing platform, I couldn’t help but wonder what its real relationship with publishers is like. As a growing competitor, it’s clear that the battles we’ve seen so far might only be a precursor to an all-out war down the road.
By Peter Nowak - Wednesday, May 9, 2012 at 2:02 PM - 0 Comments
The government’s Standing Committee on Industry, Science and Technology has released its report (links to PDF) on e-commerce in Canada, titled “Pursuing the Promise.”
It paints the same picture we’ve known for some time now–that despite Canadians being among the most prodigious users of the Internet, they really aren’t doing much online business-wise. With the amount of effort the government has put into this area, a more accurate title for the report might therefore be “E-Commerce in Canada: Half-Assedly Pursuing the Promise.”
Canadian businesses are investing 40 per cent less in information and communications technologies, or about $2,400 less per worker, than American businesses, the Committee heard from witnesses. Some of that has contributed to the fact that only 1 per cent of retail expenditures in Canada are from online transactions, compared to 8 per cent in the United States.