In the 1970s when electricity from nuclear plants was going to be "too cheap to meter," electrical everything was the rage. When nuclear power went out of fashion, so did electricity. It became the energy form that environmentalists love to hate. This distaste for electricity predated concerns about CO2 concentration in the atmosphere but was intensified by global warming concerns and the undeniable fact that a huge percentage of electricity is generated by burning coal. Reducing electricity use is still an environmental mantra. A whole generation of utility executives have grown up in an era in which they are measured by how much of their product they can manage NOT to sell.

Now it's time to sell electricity. Energy independence requires increased use of electricity. Reducing atmospheric CO2 without an economic meltdown also requires increased use of electricity.

The quickest and easiest target for electrical displacement of foreign carbon-based fuel is in home heating. In 2006 we in the United States burned 62 billion gallons of oil to heat our homes. To put this number in perspective, all on highway use of diesel fuel was only 29 billion gallons that year. Total imports of oil and petroleum products for that year were 155 billion gallons so taking home heating oil out of that would make a dent.

Now it's true that we burn even more oil for transportation than for home heating. Gasoline use in 2006 was 143 billion gallons (the number'll be lower this year). And plug-in hybrid electric vehicles (PHEVs) are very cool and will help reduce that number. But we are still at least a year away from commercial introduction of PHEVs and they won't be available in volume for a while after that. They will raise new problems (which will be solved) of disposal of lots of very toxic batteries. For some reason PHEVs ARE politically correct but maybe they'll be less so once they're widely available.

So back to home heating. It's a lot easier to get electrical energy to a house sitting still on the grid than to a car that's moving along the highway. You don't have to store electricity in a house or buy or carry around heavy batteries to use electricity in a house. But, for some reason (could it be a "electricity is evil" mindset?), there is very little discussion of converting our oil-heated homes to electricity.

"The reason is obvious," you say. "You said it above. A huge portion of electricity comes from burning fossil fuels." From an energy independence POV, that's pretty irrelevant. The fossil fuel of choice for electricity is coal. We mine that here. Second choice is natural gas which is cleaner (and more expensive) but comes from the North America in almost all cases.

From an anti-CO2 POV, heating with electricity also makes sense provided that either electricity is used to capture geothermal heat (very practical but only if you have a well or room to dig one) OR that electricity not generated from fossil fuel is used (very widely practical).

So we're back to that electric storage heat system we refused to remove from our house for sale (it sold eventually anyway). Much off-peak electricity – the so-called baseline supply – comes from non-fossil fuels, especially in areas where not much coal is used like New England. This electricity comes from hydropower and nuclear plants; an increasing but still tiny amount of it comes from solar and wind generation. The trick is to heat with these "good" electrons rather than the "bad" peak time electrons ones which are more expensive and produce more CO2 per kWh.

Electric storage heat is simple and not very expensive. All of the technology is old and tested. It requires some mechanism for storage of heat – usually special tiles. These are heated off-peak. On-peak, you use a fan to pump heat out of the tiles and into the house; even the electronics are simple. This IS a method of electricity storage but it's cheaper and more efficient than battery storage; installed correctly there is almost no energy loss because heat that "leaks" is used to warm the house.

The economics of electric storage heat only work when the consumer pays a different price for on and off peak usage. Many areas of the country do have dual rates although special meters are required. Other areas of the country are moving to "smart metering for a variety of reasons.

Groton, South Dakota is a leader in reducing costs to both its consumers and electric utility by SELLING electricity. From its website:

"The City of Groton is proud to offer Heat Storage Units and Furnaces…. There is no up-front cost for these units. You pay for the installation of the units or furnaces. Then, for the next four years, you will pay 1¢ extra on your dual fuel meter as a partial pay-back of the units or furnace. After four years, the unit is yours to keep. All the while, you will be paying the low dual-fuel rate, which is lower than the fossil fuel rates."

Political correctness has never been big in South Dakota.

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August 07, 2008 in Energy | Permalink | Comments | TrackBack | Blogroll | Books | Podcasts | Search blog | Subscribe | Email this post

The no revenue approach is a long shot, a swing for the fences strategy. If growth isn't funded by revenue, it has to be funded by investment capital. If expenses escalate commensurate with growth, then growth itself can be a problem if there is no more capital available. If growth doesn't come as fast as planned, then time becomes a problem as capital is eroded. In an exuberant time, growth itself can attract capital. But we entrepreneurs don't control the swings the of the economy; when times are sour, money hides.

It's a lot easier to raise money with a demonstrated revenue stream; even easier if you are already cash flow positive and can show in simple terms how more capital will produce more cash flow from a "proven" model. The number of investors willing to invest in pure growth is much smaller than those who will invest in a revenue stream. A company with a revenue stream can use debt as well as or in addition to equity. Moreover, if more customers automatically mean more revenue, growth can be self-funding – assuming you have some way to pay for attracting those customers.

A company with revenue can survive a downturn in the investment climate and be well-positioned when investors swing back from funk to frenzy.

This may all seem pretty basic if you've never been part of the Web economy; but it's a reeducation for those of us who've lived on the leading, growing-edge of bubbles. Maybe it's a sign of how mainstream the Web has become that most (but not all) of the opportunity is available to companies which start with a revenue model and use revenue to either fund growth or attract the funding for growth.

Next: when a no revenue strategy IS (and isn't) appropriate.

I blogged about ICQ and creating network value here.

Yahoo.licio.us is about the success of del.icio.us.

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August 05, 2008 in Web/Tech | Permalink | Comments | TrackBack | Blogroll | Books | Podcasts | Search blog | Subscribe | Email this post

Last Friday the FCC voted to uphold a complaint against Comcast for blocking BitTorrent (software for file sharing) traffic and ordered the cable company to cut it out. The two stories are actually strongly related. From a New York Times article on the decision:

"Curiously, representatives from other telecommunications companies praised the decision, even though they objected to the commission meddling in how they manage their networks. They said they would prefer such rulings to legislation from Congress, which has discussed enshrining net neutrality principles in the law."

There could well be another reason why at&t and its brethren were less than unhappy with this FCC decision: it helps pave the way for the widespread introduction of metered Internet access – something the carriers have already imposed on cellular broadband access services.

The PR argument'll go like this: "A few people are using the lion's share of our bandwidth. We're not allowed to block software like BitTorrent  used by these bandwidth hogs; we're not allowed to discriminate in any way. So we'll have to charge by the megabyte instead so that costs will be 'fairly' allocated and a few users don't spoil things for the rest of us. It would be bad for our users to allow them to actually have unlimited Internet access. This plan doesn't discriminate against anyone."

Andy Kessler blogged against the FCC talking the position it did on net neutrality:

"We need policy to help cut a path for more competition, rather than protecting incumbents -- a Bandwidth Competition Act of 2008, not bogus net neutrality. All takers should be allowed access to poles or underground conduits. This is where neutrality should be enforced, instead of being a choke point.

"Municipal or privately run wireless data services using Wi-Fi or WiMax should be sprouting like weeds. But they aren't being built because of lack of access to street lights, of all things, to set up access points. Verizon is busy rolling out a fiber optic service, FIOS, that will provide much higher speeds and real competition to Comcast. But it is slow going, as state by state video franchise rules still favor cable over any newcomers.

"A stroke of a pen can cure these ills, incumbents be damned. They will adjust. I personally would climb telephone poles on my street to run fiber if I could get 100 megabit Internet service. Any takers? Talk about an economic stimulus; this is the type of infrastructure we need. The stock market will fund it all as well as resolve overbuild problems."

The problem, as Andy points out with his usual eloquence, is lack of competition. Adding more regulation into the mix won't get us broadband in the US which is comparable with what already exists in the much of the rest of the world. Put another way, regulation usually favors incumbents and discourages innovation. There are no companies more skilled at playing the regulatory game than the existing telcos.

Here's some evidence from NewTeeVee of what has happened in the more competitive Internet market of Western Europe where utilization limits used to be the rule. A couple of years ago, metered pricing meant it could cost about $30 in charges to download a movie. But YouTube and other online video services are very popular in Europe.

"And guess what? The online video boom has taken its toll on the ISP market as well, with customers voting with their feet for better plans. And as for all the metered packages that were all the rage just two or three years ago, none of the big German ISPs are even advertising them anymore. Instead, they're trying to sell premium packages bundled with fast, unmetered broadband access.

"Take 1&1 for example, one of Germany's biggest ISPs: The company is now offering its customers a DSL package with 16MBit, unlimited bandwidth and 100 movies on demand, streamed to your PC, for just 40 euros per month. Beats paying $30 per movie download, doesn't it?"

Don't make a mistake: it's all about the video! Comcast doesn't want "free" Internet content displacing packaged entertainment plans; Verizon counts on charging for content to justify the huge capital investment its making in FiOS; at&t wants to be your content company. They each have a right to try to make money by selling packaged content. They don't have a right to use the power of what Andy calls "faux competition, cable monopolies versus phone monopolies" to assure their business plans.

But, defenders of the cablecos and telcos will say, they won't invest in their networks if they can't make more profit from them. Well, we do have the example of Europe to say that isn't so. If the present incumbents won't invest, their successors will. If you are purely in the network business, cheap content makes your network more valuable because you get more usage and can compete for a greater share of the total entertainment dollar by providing superior access.

BTW, though, I do think that Comcast should have been prohibited from blocking BitTorrent – one, because it IS a monopoly (or part of a duopoly) in its service areas and two, because it wasn't disclosing the practice. Users had a right to assume that they could use their unlimited bandwidth absent any warning to the contrary.

Technorati Tags: Comcast, FCC, metered pricing

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August 03, 2008 in Net neutrality, Web/Tech | Permalink | Comments | TrackBack | Blogroll | Books | Podcasts | Search blog | Subscribe | Email this post

NASA Confirms Liquid Lake on Saturn Moon

"PASADENA, Calif. -- NASA scientists have concluded that at least one of the large lakes observed on Saturn's moon Titan contains liquid hydrocarbons, and have positively identified the presence of ethane…

""Detection of liquid ethane confirms a long-held idea that lakes and seas filled with methane and ethane exist on Titan," said Larry Soderblom, a Cassini interdisciplinary scientist with the U.S. Geological Survey…"

Methane and ethane happen to be the main ingredients of natural gas.

Now the rest of the story from Nerdville's future-detection apparatus:

Speaker Pelosi calls the House of Representatives into emergency session to vote on a bill banning "any form of hydrocarbon extraction from any moon of a ringed planet."

"The unknowns are too great;" she says. "The risks are just too high; oil companies might have even larger profits. Conservation will be discouraged. This is another cruel distraction stage managed by the failed GeorgeBush administration."

President Bush denounces Democrats in Congress for blocking America's energy independence. "The price of oil has already begun to fall in anticipation of Ticantic (sic) supplies. Americans will know who to blame at the pump."

Senate Majority Leader Reid says that he believes the Senate is willing to go even further than the House. "No further exploration of extraterrestrial sources should be allowed. We must know who authorized the use of NASA for prospecting."

John McCain promises voters that the Cassini spaceship will NOT be withdrawn from the vicinity of Saturn until its mission has been accomplished. Moreover, he says, as President he will assure that methane or ethane or whatever from Titan will be delivered to Americans at the pump free of any highway tax.

The Democratic National Committee says "this has Dick Cheney's oily fingerprints all over it. Look for Halliburton to get an enormous contract."

Ethanol producers demand that any imported Titanic ethane be rebranded and subject to a $5.00/gallon tariff.

Barack Obama points out that the Cassini-Huygens mission is a cooperative project of NASA, the European Space Agency and the Italian Space Agency. "As a guy with a funny name," he says, "I will be willing to enter talks with the Grand Titan with no preconditions."

Al Gore points to a more ominous part of the NASA release: "The observations also suggest the lake is evaporating. It is ringed by a dark beach, where the black lake merges with the bright shoreline."

"This is a very inconvenient truth," says Gore. "There is a growing consensus that the results of our profligate ways are not restricted to our own planet."

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July 31, 2008 in humor | Permalink | Comments | TrackBack | Blogroll | Books | Podcasts | Search blog | Subscribe | Email this post

I'm not for a repeat of the 55 mph national speed limit from the previous "gas crisis" – although I'm not sure I can make a good argument against it on economic and national security grounds. I am for dramatically stepped up enforcement of the current speed limits, though. It ought to be safe to go slow – especially when slow means AT the speed limit.

Increased enforcement doesn't have to mean a trooper behind every bush; robot cameras with radar'll do fine. They have them in the UK; but, for some reason, there are signs telling people where they are.

Penalties for tailgating – which is really dangerous – need to increase.

See Slow Revenge for how much gas driving slowly can save.

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July 30, 2008 in Energy | Permalink | Comments | TrackBack | Blogroll | Books | Podcasts | Search blog | Subscribe | Email this post

A surge isn't going to win the war on drugs.

We can't declare victory and go home.

It's time (way past time) to simply declare defeat and concentrate on mitigation for chronic drug users.

The Taliban (which WAS religiously ant-drug) has morphed into the protector of illegal poppy growers in Afghanistan. The "hearts and souls" they may be winning pale in significance to the money they earn from this "protection". NATO troops who threaten the cash crops or actually burn fields don't win any friends; most of our European allies simply ignore poppy hunts as part of their mission in Afghanistan. I don't know to what extent on the ground, the US simply pay lips service to the idea of poppy control; but any attempt at poppy-control is contrary to the mission of Taliban elimination.

Corruption in the Afghani central government is one of the problems most cited in that country. Ending the prohibition on poppy growing won't eliminate corruption – but it'll sure help. BTW, we shouldn't be surprised at this corruption. Drug money is the source of much reported police corruption in this country as well. Prohibition of private pleasures leads not only to disrespect for the law but also to opportunities for unscrupulous law enforcement officials to profit.

In Bolivia a US consular official once proudly told me that he had been instrumental in getting the government of that country to agree to a coca-eradication program. "What will the coca-growers grow now?" I asked.

"Not my problem," the official said. That government of Bolivia is now the former government; Evo Morales, whose victory was partially fueled by resentment of the coca-eradication program, is no friend of the US. Turns out it WAS our problem.

FARC in Colombia – fortunately somewhat in disarray – has pretty much abandoned revolution for coca protection. The pay is better.

Gang wars in American cities are as much about drug turf as anything else. There are parts of the island of Kauai in the American state of Hawaii that tourists are well-advised to stay away from lest they stumble on marijuana growing areas.

Point is that the drug business wouldn't be any more lucrative than any other kind of agriculture if it were legal. Poppies and coca and marijuana aren't hard to grow. Might be, given today's prices, that part of the land now devoted to "drugs" would be used instead for food crops at today's prices IF we didn't drive up the value of the drug crops by destroying a lot of it in the pipeline. There wouldn't be any more money in poppy-protection than there is in wheat-protection if poppies weren't illegal. There wouldn't be a chain of violence and protection and corruption from farm to processing plant to buyers' home counties if drugs were legal.

Would more people have drug problems if drugs were legal and cheaper? Maybe; I don't know. They do seem readily available in all open and many closed societies. Prohibition didn't prevent alcoholism; we live with the very real price of alcoholism because prohibition was both ineffectual and terribly expensive in the same ways that the war on drugs is expensive today.

Should there be regulation of drugs? Sure, reasonable regulation to keep them as safe as other agricultural products AND to keep them away from children. Incidentally, I think enforcement of draconian laws against supplying drugs to minors (under eighteen) would be easier than keeping drugs away from minors today. Bar tenders, on the whole, have a stake in preventing teenage drinkers because they don't want to lose their licenses. You can't take away the license of an illegal drug dealer.

We know that no major party political candidate can or will take a position in favor of ending the war on drugs, no matter how he might have experimented "in his youth". This isn't going to be a campaign issue. Hopefully, somehow, a national consensus on legalization can develop between campaign seasons.

The war on drugs isn't one we're going to win. It's making it harder to win other wars where defeat is not an option – including the war for control of our own city streets and schools.

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July 28, 2008 in Current Affairs | Permalink | Comments | TrackBack | Blogroll | Books | Podcasts | Search blog | Subscribe | Email this post

Bonus hint #1: whenever you are about to write something that isn't a secret and isn't boring, turn it into a post on your blog. I'm taking my own advice.

The world wide web is all about links. Blogging differs from offline writing mainly in its use of links. Every two weeks I select one of my posts to run offline in some Vermont newspapers. Many of them simply can't be considered because they crucially depend on live links in them. Spelling out URLs on paper for people to type in is not at all the same thing. Blogger Galeal Zino posted a good rant on how dumb it is that his first grade son is only being taught to write on paper.

Links both help a blog attract readers and help a blog's readers find and access information and entertainment. Links are much more than just live footnotes but they are that as well.

The ethic of blogging is that you are always welcome to quote excerpts from another public blog provided that:

1. you quote accurately (copy and paste preferred);
2. you give proper attribution;
3. you link back to the source blog.

The link serves multiple purposes: it lets your readers verify that you quoted accurately and in context; it helps your readers find more information if they want it; it is your thank you to the blogger you quoted and helps him or her attract new readers; it may get the blogger you quoted to read your blog; it may even get him or her to link back to you and help you get more readers.

Bloggers have many ways to know what sites sent traffic to their site including tools built into most blog hosts. If I see any substantial amount of traffic coming to my site from another site, I almost always take a look at that site to see why. If the site's interesting, there's a good chance I'll link to it at some point. Linking to other bloggers gets you their attention.

It IS bad manners to quote 100% of someone else's post without explicit permission. If you think your readers should read all of someone else's post, link them over to that blogger's site.

There is a mechanism called "trackback links" that is meant to allow one blogger to put a link on another blogger's post as a sort of comment saying "I blogged about this post here". Unfortunately, phony trackbacks are used as spam to increase traffic and google juice for sites so many blogs don't allow trackbacks. Fractals of Change does allow trackbacks; but, unlike comments, they don't go live until I OK them. Most ARE spam.

However, if you have posted something which significantly continues a discussion which began on another site, it is perfectly good manners to post a substantive comment on that site and include a link back to your post.

End of today's lesson. BTW, you can read Al's first post on why 3% down payments are a bad idea here.

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July 24, 2008 in Weblogs | Permalink | Comments | TrackBack | Blogroll | Books | Podcasts | Search blog | Subscribe | Email this post

This is good news, right? This convention center in Boston is NOT charging an arm and a leg for temporary roaming Internet access. BTW, it worked pretty well at a little less than one meg in the downwards direction.

But, even if access to information is free, the energy to power that access isn't. See below:

I think this may be aimed at people who forgot their chargers because there were plenty of wall plugs you could camp next to and get some free kilowatt hours.

But my guess is that we'll see less free access to energy and more free access to the Internet.

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July 23, 2008 in Energy, Web/Tech, WiFi | Permalink | Comments | TrackBack | Blogroll | Books | Podcasts | Search blog | Subscribe | Email this post

"'We're sitting on the sidelines not because we're lazy. We're sitting on the sidelines because even if this category takes off, and we get our piece of the pie, it doesn't add up,' said Paul Moore, senior director of mobile product management for Fujitsu. 'It's a product that essentially has no margin.'"

No one can blame Fujitsu for wanting to stick with higher-margined traditional laptops. But you don't always get what you want. If this category of thin, light, cheap, energy-light computers built primarily to surf the Internet and use online applications takes off and begins to cut into sales of today's full-featured laptops, Fujitsu will lose its current laptop business and have nothing to replace it with.

You can't make displacement products disappear by sticking your head in the sand. You can't always maintain the margins you were used to. In fact, if you're in a line of business where you have "comfortably" high margins, you're in a line of business which is particularly susceptible to disruptive attack.

It Fujitsu really believes there is no market for this product, it is good business to avoid making it. But, if Fujitsu believes there is a market, then they need to figure out how to make their existing product more competitive or how to compete in this market and add enough value to earn a margin or how to disrupt the disruptors with innovation of their own (or get a law passed against their competitors but that's unlikely in this case).

Further down in the story the Times says:

"Intel is projecting that by 2011, the market for the netbooks will be 40 million units a year, which is why Intel is jumping in with low-powered chips that would be used in the netbooks and the net-tops… Intel executives think the market for low-cost PCs is too big to pass up, though it does raise a potential threat to more powerful and more profitable computing lines."

Microsoft, according to the story, is also a participant in this market:

"Microsoft has been a reluctant participant too. Even though it is no longer selling its Windows XP operating system software, it made an exception for makers of these low-cost laptops and desktops. Microsoft said it was responding to a groundswell of consumer interest in the low-cost machines, but some makers of those machines say Microsoft did so reluctantly because it did not want to lose market share to Linux."

Reluctance is OK ; sitting on the sideline sulking is not.

Years ago I tried to interest my then-employer AT&T in VoIP. To their credit, some people in the company believed AT&T should be a leader in this new category of voice service. But the argument that kept AT&T out of VoIP was "why should we participate in cratering the margins of a profitable business." It was somewhat a holdover from the monopoly days when AT&T's lack of participation in a technology might have slowed the spread of that technology. When my counter-argument "because it's going to happen anyway and we'll be better off leading rather than following" wasn't persuasive, I left to cofound a VoIP company secure in the belief that I wouldn't have to worry about competition from AT&T.

I have no idea whether net-top computers will succeed. But I do know that companies have to face disruptive competition squarely in order to survive.

Technorati Tags: AT&T, Fujitsu, net-top, netbook

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July 21, 2008 in CEO View, Web/Tech | Permalink | Comments | TrackBack | Blogroll | Books | Podcasts | Search blog | Subscribe | Email this post

But the other day I had a problem I couldn't find an answer to. The rest of this post is a pretty nerdy discussion of the problem and a workaround. It's here so that other people with the same problem can find it by googling and as my contribution to helping each other.

I've been testing the code I'm working on with Internet Explorer and Firefox. Before it can be released to production it'll have to be tested with Safari as well and with some mobile phone browsers but for now I'm just using these two. Obviously, this is a web app that runs in a browser although portions are also PHP running on a server. Recently Mozilla released Firefox 3.0. I deliberately didn't upgrade because I figure that most people are still using 2.x and will be for some time so I wanted to test with that.

My colleague Hardeep, however, did upgrade and promptly reported that my code didn't work at all with FF3. He was kind enough to send me console debugging logs and pointers to some known compatibility issues between FF2 and FF3. These issues weren't what was affecting me but the logs he sent pointed me in the right direction. FF2 and FF3 work differently when retrieving objects by tag from an XML structure when the XML is defined in a specific namespace (I'm trying to use as many of the right keywords as possible so that other people with the problem will find this explanation). The javascript method getElementsByTagName(tagName) requires that the prefix be part of tagName in FF2 but does NOT want the prefix as part of tagName in FF3 (or Internet Explorer, for that matter).

I used to have code that looked like this:

if (window.ActiveXObject) { // if IE

var thePrefix="fi:"; // need prefix

} else {

var thePrefix=""; // else no prefix

}

var responseAttributes=xml.getElementsByTagName(thePrefix+"response")[0].attributes;

It wasn't good technique anyway and promptly broke on my bad assumption that IE was the outlier (as it often is) and that all other browsers would work differently. The statement looking for attributes caused a browser error since there were no elements with the tag "response" from FF3's POV. It wanted "fi:response" instead.

New code looks like this:

var thePrefix="";

try {

var responseAttributes=xml.getElementsByTagName("response")[0].attributes;

}

catch (e) {

thePrefix="fi:";

var responseAttributes=xml.getElementsByTagName(thePrefix+"response")[0].attributes;

}

This implementation adjusts itself to whatever the particular browser wants. The reason I bother to set thePrefix is that I have many other invocations of getElementsByTagName() further down in the code. Note that I also could have written:

If (xml.getElementsByTagName("response").length==0) {

thePrefix="fi:";

} else {

thePrefix="";

    }

var responseAttributes=xml.getElementsByTagName(thePrefix+"response")[0].attributes;

Also note that both of these examples rely on my certainty that the tag "results" does actually exist in the XML. Once we knew what the problem was. Hardeep did find that someone had blogged about it. Also, when I went to post the bug to bugzilla, I found that it had been reported (several times) but will not be fixed because the FF3 (and IE) behavior is correct and FF2 is not. BTW, the absolute correct way to do this is with getElementsByTagNameNS – but this doesn't work in IE according to W3.

Technorati Tags: firefox, getElementsByTagName, namespace, xml

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July 17, 2008 in Nerding | Permalink | Comments | TrackBack | Blogroll | Books | Podcasts | Search blog | Subscribe | Email this post

Here's the puzzle for those who missed it:

You are a guest on a game show. There are three closed doors; behind one of them is a car you want to own; behind the other two are goats you don't want despite the fact that they don't burn gas.

You have to pick a door. After you do that, the host will pick a door behind which there is a goat (he knows what's where and has to follow the rules). You then get to decide whether you should be awarded what's behind the door you picked initially or what's behind the door that neither of you picked.

The questions are:

Does it matter which strategy you pick?

If so, which strategy is favored?

What is the quantitative advantage, if any, of the favored strategy?

For extra credit: why?

The answer:

You want to pick what's behind the door that was picked by neither you nor the host. If you stick with your first choice door, your odds of winning are 1 in 3. If you switch to the remaining door after you and the host pick, you increase your odds to 2 out of 3 of ending up with the car.

But this is counterintuitive. I had to be beaten into accepting it but it's right. Here's why:

Obviously, if you pick a door at random (you have no information so your choice IS random), your odds of picking a door with a car behind it are 1 in 3; that part's easy. If you stick with the door you picked, you will win one third of the time and lose two thirds of the time.

Now suppose you follow the switching strategy. One third of the time you will have picked the door with the car initially. In this case you'll lose, however, the other two thirds of the time you'll win. That's because you are actually getting help from the game show host when you follow this strategy and he DOES have information!

Let's look more closely at what happens when you pick a goat door initially (which you will do two thirds of the time): In that case there are two doors left, one with a goat and one with a car. The host MUST pick the door with the goat (see rules above). That leaves only the door with the car which you then get to drive home. Whenever you pick a goat door first, you WILL win with the switching strategy thanks to the host eliminates the remaining goat door. Since your odds of picking a goat door are 2 in 3, you will win two thirds of the time with the switching strategy. QED.

If you don't believe me, check many diagrams in wikipedia.

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July 16, 2008 in Puzzles | Permalink | Comments | TrackBack | Blogroll | Books | Podcasts | Search blog | Subscribe | Email this post

David Isenberg famously explained that the success of the Internet as a platform for innovation is due to the fact that it is a "stupid network", blissfully unaware of and unoptimized for the applications which send packets over it. David's thesis was heresy at a time when telcos were spending billions of dollars building "smart networks" – each had its own brandname and advertising campaign. The smart networks were and remained innovation-free for the simple reasons that you couldn't build an app for them which didn't fit the preconceptions of the engineers who built the smarts into the network and you couldn't deploy an app onto those networks without the permission of the carriers that owned them.

On the Internet, the devices ("endpoints" to us geeks) are smart but the network knows about nothing but packet routing; it is (or should be) blissfully unaware of what these packets contain, what applications the endpoints are running, and all of the many complex interactions flowing through its routers. The designers of the Internet didn't even plan on its being used for email let alone web browsing, voice over IP, Googling, or video streaming. It could be made a better network for any one of these applications by optimizing it for that application but only the expense of other applications, particularly those yet to be invented.

So what's the lesson for the new electrical grid we want to build?

Make it stupid! Make it open! Enable innovation! And, again learning from the Internet, make it robust by making it distributed without a central command point or central points whose failure would bring down the whole network.

Of course we want smart metering. But smart metering's an application on this network. The information flow for smart metering should be over the existing Internet – which today shares poles and conduits with the power grid and may be extended in some places over the current-carrying wires.

Of course we want to be able to deploy new sources on the power grid and the grid has to be built to where the sources are.  These new sources are like server farms on the Internet; their output is accessible anywhere on the grid. The grid should be "smart", in a distributed sense, about having power flow from regions with a surplus to regions with excess demand. The power network, or the Internet as a parallel information network, should provide information used for real time pricing but the actual pricing should happen at the edges of the network and accommodate many different pricing and settlement schemes.

There are differences between the Internet we know and love and the power grid. One is that transport is a more significant component of the cost of power than it is of the cost of information (put another way, only  a tiny fraction of a kilowatt hour is need to move a packet from anywhere on the Internet to anywhere else). So transport and distance MAY be a more explicit part of energy pricing than they are of information pricing. On the other hand, electricity is fungible and information is not. I want the response to my query from Google, not someone else's fun video; but, if I buy a kilowatt hour, I don't really care(economically and physically) if it comes from the wood-fired plant in Burlington, Vermont Yankee, the dams of Canada, or a windmill in Nebraska, I couldn't tell the difference even if I did care.

The new grid will have to accommodate today's model in which most of us buy power from a local company which buys regionally when it has to and usually belongs to a pool which can buy nationally. But the new grid should NOT be built assuming or, worse, assuring that this is the only model that will work. The point is that we don't know what our mix of electric power sources will be in the future: how much local to save on transportation and for reliability? How much where the wind blows or the sun shines? We don't know much about how we'll use electricity: heating? transportation? lighting of what? recharging of what? we don't know whether or where we'll store electrical energy.

Despite all we don't know, we still need to rebuild our electrical grid. Because of what we don't know, we want to build a stupid grid which, like the Internet, will allow almost limitless innovation at the edge.

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July 14, 2008 in Energy, Web/Tech | Permalink | Comments | TrackBack | Blogroll | Books | Podcasts | Search blog | Subscribe | Email this post

Here's the puzzle:

You are a guest on a game show. There are three closed doors; behind one of them is a car you want to own; behind the other two are goats you don't want despite the fact that they don't burn gas.

You have to pick a door. After you do that, the host will pick a door behind which there is a goat (he knows what's where and has to follow the rules). You then get to decide whether you should be awarded what's behind the door you picked initially or what's behind the door that neither of you picked.

The questions, smart reader, are:

1. Does it matter which strategy you pick?
2. If so, which strategy is favored?
3. What is the quantitative advantage, if any, of the favored strategy?
4. For extra credit: why?

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July 13, 2008 in Puzzles | Permalink | Comments | TrackBack | Blogroll | Books | Podcasts | Search blog | Subscribe | Email this post

If you can't see the video, follow this link.

On the other hand, some people pay more per gallon for the stuff than they do for gasoline.

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July 10, 2008 in humor | Permalink | Comments | TrackBack | Blogroll | Books | Podcasts | Search blog | Subscribe | Email this post

The elevator speech from the newly launched (ning-based) social website www.pickensplan.com is this:

"America is blessed with the world's greatest wind power corridor and abundant reserves of clean natural gas. The Pickens Plan will utilize these tremendous resources to build a bridge to the future — a blueprint to reduce foreign oil dependence by harnessing domestic energy alternatives and buying time for us to develop even greater new technologies.

"The Plan calls for building new wind generation facilities that will produce 20% of our nation's electricity and allow us to use natural gas as a transportation fuel. The combination of these domestic energies can replace more than one-third of our foreign oil imports. And we can do it all in 10 years".

Right now we use natural gas to generate electricity – especially at peak times. If most of this natural gas can be displaced by wind-power as an electricity source, it can then be used as fuel for cars and trucks displacing diesel fuel and gasoline made from imported oil. There are seven million natural gas vehicles on the road today worldwide(According to NGVAmerica); and the switchover from gasoline to natural gas would be much easier and cheaper for the auto industry than a switch to electric vehicles (which I believe will happen eventually). There are already some natural gas fueling stations in operation including one in Burlington, VT (see map for a st