Download six minute audio narration to iPod, iPad, and iPhone.

For exceptionally talented and dedicated online students, the new version of Apple’s iTunes-U implies Superman can soon become a virtual reality.  
Part One of our three-part analysis of Apple’s iTextbook and iTunes-U initiatives observed that the fundamental disadvantage of conventional books is their limitation as isolated information silos. In contrast, e-books are simultaneously both (1) information repositories, and (2) portals into the nearly infinite resources of the Internet. Part Two concluded Apple’s iTextbooks shall emphasize a couple of additional features that conventional books cannot match. Firstly, they encourage authors to mix media, including text, graphics, animation, and video. Secondly, they permit interactivity. Part Three of our commentary (today) examines the potentially deep implications of iTunes-U.

Prior iTunes-U

Four years ago Apple invited colleges to upload audio and video lectures into iTunes as free podcasts. Some comprise an entire series that encompasses actual college courses. Participating universities include Stanford, Yale, MIT, Texas A & M, UCLA, University of Paris, and University of Tokyo, among many others. Auburn University provides a number of lectures including (non-typically) a commencement address by Apple CEO, Tim Cook.  Presently available podcasts total about one-half million and there have been seven hundred million downloads.

While exercising, I’ve listened-to and watched (on a stationary bike) podcasts of entire courses including two from Yale and one from Missouri State. A key advantage is that podcasts can be watched repeatedly thereby promoting learning through repetition. Furthermore, the best and most lucid teachers – such as Professor Walter Lewin of MIT – can reach far larger audiences.

While Lewin’s physics lectures require calculus, a simpler example demonstrates how online video can teach seemingly difficult concepts. Derek Owens teaches math and physics via the Internet for home-schooled high school students, mostly in Atlanta. (Although he does not use iTunes-U, as shall be explained shortly, there is now no reason why he cannot.) Watch as Derek derives an expression for electric field intensity using only high school algebra. (I promise; liberal arts grads can understand this.)

New iTunes-U

Starting this month, iTunes-U is no longer limited to video and audio. Instead, iPad owners essentially audit real classes. Presently there are one hundred from Duke, Stanford, Yale, MIT, Open University, Harrisburg Community Colleges, and other institutions.

iPad owners download the iTunes-U App where a “Catalog” button in the upper left connects to available courses. Users may examine course descriptions and even class ratings provided by earlier students. They join a class merely by touching a “Subscribe” icon. Although iTextbooks are often purchased, other study materials are typically free. Examples include lectures, assignments, syllabus, keynote presentations, and dot-pdf monograph reading homework. Creative instructors might also have developed special teaching apps, which could be either free or purchased.

Aside from the lectures, teachers communicate by posting notes which are available to all subscribers via a “Posts” tab in the App. As students read the iTextbook they may highlight text with a simple finger motion on the iPad screen. The resulting text is not only highlighted within the iTextbook, but also stored on separate pages in a “Notes” tab. This enables highlighted comments to be studied and memorized much as if they were written on paper index cards.

Also beginning this month, iTunes-U is permitting teachers in the K-through-12 sector to upload courses. Previously, only college lectures were allowed. In short, the new iTunes-U is a portal through which Superman can fly into public education. While he may not be able to fix everybody’s problems, he has the potential to save a small fraction of students who are exceptionally bright and dedicated, but would otherwise have no access to a quality education. It’s a good start.

Download eight minute audio narration to iPad, iPhone, and iPod.

Apple’s iTextbook emphasizes a couple of additional features that conventional books cannot match. First, it encourages authors to mix media. Second, it permits interactivity.

Mixed Media

iTextbooks are not limited to text and graphics. They can incorporate videos and animations. Moreover, to see more detail and gain added comprehension readers are permitted to enlarge and rotate pictures or diagrams on their iPad screens. Such examples are present even among the handful of iTextbooks currently available. One example is a 2,000 page McGraw Hill book entitled Physics: Principles and Problems. It is the iTextbook version of a venerable high school text retailing for $115 in hardcover, as compared to only $15 as an Apple iTextbook.

If the physics iPad text is a representative sample, the ten iTextbooks available today do little more than permit readers to enlarge photos that were already included in the original hardcovers. Topics such as electromagnetic fields and waves would have benefitted significantly from more creative treatment.

Consider the case of electric flux. Assuming students of the McGraw-Hill text are simultaneously learning vectors, trigonometry, and calculus, an animation such as this would illustrate why the electric flux is dependent upon the angle of the electric field. Although the concept is simple the mathematical expression can be confusing to neophytes:

Even more abstruse concepts such as Gauss’s Law, Maxwell’s Equations, Div, Grad, and Curl would similarly benefit from imaginative animations.

Interactivity

iTextbooks are capable of interacting with readers. For example, iPad’s current physics textbook provides regularly spaced multiple-choice quizzes. Thus, pupils can quickly look to see if their selected responses are correct merely by placing a finger on the “check answer” icon. An incorrect response displays a red “x”, but permits students to try again. They may “clear” responses anytime thereby enabling them to retake quizzes whenever desired.

Historically, physics students learn best by completing assigned problem-sets following of each chapter. That’s not likely to change. But future iTextbooks might also permit stumped pupils to beckon tutorial lectures pertinent to each problem merely by placing a finger on a “tutorial” icon adjacent to each numbered problem.

Unfortunately interactive quizzes in the McGraw-Hill physics iTextbook have too many incorrect answers falsely identified as correct. Apparently they rushed to the market. Nonetheless, the concept of interactivity is powerful.

Publisher Benefits

Although the hardcover version of McGraw-Hill’s physics text sells for $115 as compared to $15 for the iTextbook version, the publisher gets a couple of advantages.

First, since the iTextbook is only available on iPads, students cannot sell used copies thereby competing with new hardcover editions of the same book. Presently used copies of the McGraw-Hill physics text are selling at Amazon.com for as little as $5.

Second, iTextbooks are easier to update. Thus, publishers avoid a need for an additional printing run and the associated inventory risks. Updates can also be more frequent because there’s no minimum economic production run as would be required for hardcover texts.

Publishing Tools

Undeniably, creating mixed media and interactive textbooks puts extra work on authors. It may launch a new kind of authoring collaboration among skilled professionals in various media specialties. Nonetheless, it also provides innovative authors a means to differentiate their work. While the added labor will tend to increase the cost of such textbooks, the offsetting ability to avoid producing, shipping, and inventorying as many physical versions as would otherwise be required, will provide savings.

While iTextbooks authoring is more complex than writing a conventional manuscript, Apple provides tools to at least make it manageable. Owners of Mac computers can download a free application, termed iBooks-Author, to create iTextbooks (or e-books) for sale at Apple’s iBooks Store.

The software enables text in popular word processing programs like Microsoft Word to be dragged-and-dropped into the e-book where it is automatically formatted. Additionally, iBooks-Author includes a number of “widgets” for use in placing multimedia content into the e-book text. Examples include widgets for (1) video, (2) “slide show” decks in Apple’s Keynote, (3) pictures, and (4) diagrams. Authors skilled with JavaScript and HTML can even produce custom widgets to create interactive objects, such as quizzes, or links to Internet content.

Conclusion

Admittedly, the few iTextbooks presently available seem to make limited use of mixed media and interactivity. Similarly, Apple’s authoring tools are fairly limited to authors of ambitious projects who are also unskilled with JavaScript and HTML. Nonetheless, I’d wager $100 against a good Cuban cigar that both authoring tools and the multimedia-interactive content in future iTextbooks will steadily improve, eventually reaching a point where they are the new paradigm.

Part 3 of our analysis will examine how the new iTunes-U initiative will change education and teaching.

Download six minute audio narration here.

At age thirteen Lightoller apprenticed aboard a four-masted “three-skysail yarder.” Being an unfamiliar term, I put my finger on “skysail” to summon iPad’s dictionary which described it as “a light sail above the royal”. The definition was not useful since I was also unfamiliar with the meaning of “royal” sails. Fortunately, iPad’s dictionary also provided links to Google and Wikipedia. The Wikipedia link connected to a full explanation including photographs and diagrams identifying all the sails of a clipper ship.

The ability of iPad’s dictionary to almost effortlessly connect to Wikipedia — or to “Google” unknown words — is a particularly helpful way for individuals reading e-books to learn unfamiliar nouns. For example, compare the Webster definition of a “buntline-hitch” to that of Wikipedia. (Is it any wonder that Internet users protested Congressional copyright bills that threaten viability of the Wikipedia?) Similarly, when Lightoller narrates an earlier shipwreck incident at the remote Île Saint-Paul, the Google Earth application permits readers to explore the island “virtually”.

It’s not the paper form-factor per se threatening obsolescence of conventional books. Instead, it’s the fact that they are isolated information silos. They cannot connect to the “infinite mind” of the Internet. Gradually they’ll become about as useful as a non-networked computer. Much like a handheld calculator, we’ll use them as a special purpose tool. For example, paper books will be convenient in environments that are physically menacing to tablet computers, such as a sandy beach, or an open boat.

Judged against the Kindle-App-on-iPad, e-book reading on Amazon’s monochrome Kindle fails to be a comparably transforming experience. First, the dictionary available on black & white Kindles does not easily connect to the Internet. There are no Google and Wikipedia links within the dictionary, whereas iPad provides such links for each looked-up term. Second, web browsing on a monochrome Kindle is cumbersome. Consequently, much like conventional books, the units are isolated information silos with the limited advantage of being able to hold multiple “books”.

No doubt Kindle Fire was developed partly to address the “information silo” limitation. However, I’ve delayed in buying a Fire on the presumption that initial models will have new product bugs which Amazon will likely correct in the future. Also, the lower $200 price suggests that it will not be as capable as an iPad and therefore provide less demonstrative insight into the full capabilities of e-books.

In time iPad and Fire will compete as “connected” e-book readers. Apple starts with superior hardware and software thereby enabling iPad to function better as a multipurpose unit. Thus, to Amazon’s disadvantage the iPad will likely be more attractive to App developers. However, Amazon will benefit from a lower price and the company’s greater skills at merchandising content.  For example, many public domain Kindle books are free and the company also has a lending library for selected titles. Presently Amazon also leads Apple in the realm of self-publishing and is further down the learning curve in dealing with abuse. One example is filtering spammers who steal content (from the Web or elsewhere) and sell it at the Kindle store.

The revealed benefits of habitual e-book reading merely hint at the implications of Apple’s iTextbook and iTunes-U initiatives. Like Titanic, conventional publishing is already negotiating an alien ice-field, but immutable educators will have epitaphs reading something like “died age 30, buried age 80.” Part-2 of our analysis will address more specifically Apple’s likely impact on the future of textbooks and the teaching profession.

Download 6-minute audio narration to iPod, iPhone, and iPad here.

Presently, “cord-cutting” is the Pay TV industry’s foremost concern. Netflix, Hulu, iTunes, and Amazon.com are pioneering alternate ways to acquire popular programming over the Net as opposed to Cable systems. Equally important is “Long Tail” content on YouTube and other Internet video sites.  “Long Tail” theory implies that while we share interest in popular content, we also have more narrowly defined interests shared with viewer-groups too small to justify mass market distribution. But the Internet shatters such limitations enabling video content to be made available for vanishingly small audiences. Arguably, cultural programming has already migrated to the Net.
While “cord-cutting” threatens Cable operators, it is a clear-and-present-danger to Satellite TV systems. That’s because only a small fraction of Satellite TV subscribers also get Internet service via satellite.

The two dominate domestic Satellite TV operators are DirectTV and Dish Networks. In combination they have about 33 million domestic subscribers with an estimated one-third in rural locations. Most subscribers also want Internet access, but Satellite TV operators subcontract Internet access to third parties which are generally telephone companies. Thus, when Satellite TV subscribers choose to bypass Pay TV by metaphorically “cutting-the-Satellite-cord”, they are most often discontinuing Satellite TV service and upgrading ISP service from telephone carriers. Consequently, Satellite TV operators lose the Pay TV subscriber without benefitting by keeping, and upgrading, the Internet subscriber.

Unfortunately satellite-based Internet service is often unable to compete effectively. Since geosynchronous satellites are 22,000 miles distant, the round trip to a file server on the Internet is 88,000 miles. The lengthy round trip combined with sundry routing & processing results in delays of nearly a full second which is a near-eternity in the Internet world. The inherent lag is intolerable for a number of applications such as Voice-over-IP (Skype), Internet gaming, and Virtual Private Networks.

Fortunately, terrestrial Wireless Internet Service Providers (WISPs) provide an opportunity for DirectTV and Dish Networks to meet the challenge of “cord-cutting.” Since Wireless ISPs normally utilize licensed-exempt spectrum, DirectTV and Dish can build their own WISP networks, or can acquire existing ones.

A Wireless ISP provides broadband Internet service from fixed base stations to antennas typically mounted outdoors on customer premises. Base stations connect to the Internet backbone via fiber, cable, or point-to-point microwave lengths known as “backhaul”. Much like Satellite TV companies, Wireless ISPs originated in sparsely populated rural markets where broadband Internet access from Cable operators and telephone companies was unavailable.  Presently, the WISP industry has about 2 – 3 million subscribers.

There are two reasons why WISPs are good diversification investments for Satellite TV operators. First, they enable Satellite TV companies to offer broadband Internet service under their own control. Given WISP subsidiaries, DirectTV and Dish will no longer be as reliant upon the Cable and telecom “partners” used historically. Second, use of license-exempt spectrum will enable WISP networks to roll-out quickly in response to subscribers who are discontinuing Pay TV service.

Finally, a combination of technological and regulatory advances are enabling WISPs to (1) reach more distant subscribers and (2) gradually encroach into more densely populated geographic markets.

First, FCC approval of television band white spaces increasingly enables Wireless ISPs to reach subscribers who could not be adequately served by conventional unlicensed bands. This applies to both rural and — to a lesser extent — urban markets. Second, WISP transceiver and router hardware prices are quickly declining owing to a shift in recent years toward suppliers who utilize commercial integrated circuits and open software, as opposed to the custom chips and proprietary software employed by the former leading market-share equipment vendors.

In short, DirectTV and Dish Networks may wish to consider (1) building their own Wireless ISP networks, and/or (2) acquiring existing WISPs. Additionally, both Satellite TV operators have the funds required to capitalize on the mostly (to date) latent capabilities of TV Band White Spaces for Internet access.

Today’s 18-minute audio interview is with Jim Burger who is a copyright attorney with Dow, Lohnes in Washington, D. C. He’s specialized in copyright law for thirty years and prior to Dow, Lohnes was on the legal staff at Apple.

Wikipedia turned out the lights yesterday to protest two bills in Congress. Proponents claim the bills need to be enacted in order to protect movies, recorded music, and other “intellectual property” from piracy. Opponents assert enactment of the bills will, (a) censor the Internet, (b) obstruct innovation, and (3) place expensive burdens on innocent third parties.

To download 18-minute audio interview to iPod, iPhone, or iPad, click here.

The House Bill is termed the Stop Online Piracy Act (SOPA). The Senate Bill is called the Protect Intellectual Property Act (PIPA). Most Internet-centric organizations object to the bills, but Wikipedia is the paragon for three reasons. 1. Wikipedia is hosted by a non-profit organization which would likely incur considerable expense even trying to comply with provisions in the bills and risk enormous liability for non-compliance.

2. Compliance would be an almost impossible task for the 1,800 Wikipedia editors who are unpaid volunteers.

3. Wikipedia is the sixth most popular website on the Internet. Millions of people contribute content and tens of millions use it daily.

Wikipedia has at least two legitimate complaints.

First, the bills enable the Justice Department to request that a Judge order all domestically hosted websites to block access to overseas websites that Justice concludes are involved in Internet piracy. If the overseas site is a small business it will not have the money to represent itself at the hearing, thereby making it easy for the Judge to agree with the Justice Department even if targeted websites are legitimate.

Since Wikipedia has millions of people contributing content - including website links - it is almost certain some of the alleged infringers will have links on some Wikipedia articles.  Such links may be disguised, like this:

http://tiny.cc/10k5r

It’s obvious that the above url has no evident relation to the actual domain, but the bills would require Wikipedia to investigate every such arcane link.

Moreover, Wikipedia is required to bear the expense of investigating such links, whereas the motion picture and record label industries offload such costs to the Justice Department – meaning you and me as taxpayers.

Given the enormous Federal budget deficits it’s surprising that so many Congressmen and Senators believe the taxpayer should bear the expense of prosecuting infringement claims for Hollywood, drug companies, and record labels while simultaneously requiring innocent third parties like Wikipedia to pay for the onerous compliance.

A second legitimate complaint is that the bills essentially mandate censorship of the Internet. Once there is a precedent for censorship it seems likely other special interests will seek censorship as well. After such a trend starts there’s no telling where it will end.

“Billy” discusses the earlier trials that KTS did with White Spaces under experimental licenses. He also shares his thoughts regarding how the White Spaces market will evolve in both the United States and abroad.

Download 16-minute audio interview to iPod, iPhone, and iPad here.

One of his conclusions is that municipal Wi-Fi markets will benefit considerably from TV Band White Spaces. He reasons that the FCC envisions White Space technology as encompassing the best of both licensed and unlicensed networks. While they will be able to provide the interference protection of licensed networks they simultaneously offer the innovative free-market access characteristic of licensed-exempt networks. By way of example, he explained that a suburb of a major Florida city tried to offer blanket Wi-Fi service about six years ago. After getting started, they discovered it was too expensive to provide all the required access points. Today, Billy believes that same city could accomplish their goals by providing Wi-Fi access points at locations where citizens tend to congregate.

Examples of such centers-of-congregation might include the city center, community recreation centers, and outdoor parks, among others. Such locations might be thought-of as “hot zones”. The hot zones could be connected via White Spaces transceivers to a central point where the entire network is connected via fiber to multi Gigabit Internet backbones in a manner demonstrated by this half-minute animation.

Future unlicensed wireless Internet access networks will use a variety of standards to provide large zones of coverage. Such standards will include WiMax, WiFi, and White Spaces. As users, we won’t know, or care, which standard is being used. All we’ll care about is how well and how fast we are connected wirelessly to the Internet within a wireless coverage zone.

Download 19 minute audio interview to iPod, iPhone, or iPad here.

Wi-Max discussions can be confusing because there are two standards.
One – 802.16e – is a 4G radio service for mobile devices like cell phones. Historically, the “Dot-e’s” leading proponent in the United States was Clearwire which wanted to offer broadband cellular service to compete with Verizon, AT&T Mobility, Sprint, and T-Mobile However, Clearwire abandoned “Dot-e” last year and is now concentrating on LTE which is the 4G standard most other U.S. cellular carriers will use.

The second Wi-Max standard, termed 802.16d, was developed for the sole purpose of linking the “last mile” to the subscriber. Dot-16d is the chief standard radio technology for providing last mile connectivity although there are some other proprietary alternatives like Motorola’s Canopy and variations of WiFi on steroids, such as White Spaces. “Dot 16-d” base stations can provide Internet service from three to twenty-five miles.

To date, LTE has been primarily focused on providing service to mobile devices. Therefore the terminal unit is constrained by battery life and a small form factor to enable handheld devices. As a result, both ends of the link are not symmetrical. The terminal unit requires a great deal of additional signal processing to overcome the limited power and antenna gain of the small form factor. This processing power is usually leveraged off the terminal device’s main processor whether it’s a cell phone or a tablet.

The base station also has added complexity. It must have additional signal processing to overcome the limitations of the terminal device and it must support the fast handoff requirements expected of a mobile apparatus. The end result of this asymmetrical connection and the requirement for mobility limits the expected range of a terminal device to the base station to a range of one-to-two miles.

Alvarion’s WiMax future will be concentrated on the fixed station market. It acquired Wavion in November to better serve fixed-station customers with a mix of WiMax and WiFi base stations and access points. WiMax will provide the “last mile” Internet connection whereas Wavion WiFi units, which are designed to be mounted outdoors or indoors, will enable subscribers to create large area “hot zones” providing WiFi coverage both indoors and outdoors.

Triad is a radio engineering consultancy with two basic services. One is to help equipment vendors and wireless operators bid for, and build, economical wireless communications systems, typically not involving cellular carriers. A second function is to advise equipment vendors on future designs.

Download thirty minute audio interview here.

Rory believes that unlicensed Wi-Fi networks are poised to handle a considerably larger-than-historical share of Internet traffic for four reasons.

First, base station and access point equipment available today is far less costly and more capable than those of the ill-fated municipal wireless networks attempted about six years ago. Cost breakthroughs have been achieved not only by steady progress in semiconductor technology, but by a shift toward commercially available chips and open software standards.

Second, as a design consultant to equipment vendors, Rory holds expectations of further feature and technological advances in the future which he cannot discuss publicly.

Third, Rory believes that blanket Wi-Fi networks can prove to be commercial successes in suburban markets because infrastructure costs can start as low as $10,000 per square mile. Traditionally, such networks have been limited to less densely populated rural areas.

Fourth, broadband Internet access is almost becoming an economic necessity to most families. For example, it’s often not even possible to apply for a good job without Internet access, but the recession is leading subscribers to drop bundled CATV service that is often required from landline carriers for reasonably priced Internet access. In contrast, unlicensed Wi-Fi systems can provide attractively priced Internet service to former Cable TV subscribers who were often forced into “Triple Play” contracts merely to get reasonably priced Internet access.

Rory’s term for a successful Wi-Fi Internet service business strategy is “Guerrilla Wireless.”  The concept is to first blanket a coverage area with Wi-Fi using infrastructure priced at $10,000 per square mile. One target would be subscribes dropping Cable TV service, but wanting only low priced broadband Internet access. A basic principle is to design the Wi-Fi network in a manner that makes it easily upgradable. As user patterns develop, more capacity and capabilities can be added at higher rates as required within each applicable sector.

A key “Guerrilla Wireless” advantage that cannot be matched by landline Internet providers, is that “Guerrilla” subscribers may be empowered to use their portable devices anywhere within the blanketed zone, thereby avoiding cellular Internet access fees.

As noted five years ago in this Inside Digital Media video podcast, the device is more accurately labeled a “teleputer”. (The podcast is so old it was done in Windows Media Video). George Gilder originated the concept about twenty years ago when he envisioned a hand-held unit providing convenient wireless access to a global computer network. It was kind-of the evolutionary destination implied by a popular computer industry slogan at the time, to wit, “the network is the computer.”

Download five minute audio narration to iPhone, iPad, and iPod here.

Each day Gilder’s concept becomes increasingly obvious to a growing proportion of iPhone users.  Today everyone realizes telephone conversations are only one of many useful iPhone functions. More significantly, iPhone users are progressively learning that computer applications are becoming the unit’s raison d’etre. In short, the phone’s digital capabilities such as photography, geo-location, audio & video playback, and especially Internet access, are the defining characteristics. Applications like Skype and FaceTime portend an era when cellular telephony per se, becomes irrelevant to iPhone owners.

Since we identified the iPhone as a “teleputer” five years ago, some may question a reason to revisit the subject.

There are two.

First, it underscores that the Wireless Internet shall become an indispensable component of the overall Net. Ultimately it will become the final link to most Internet-connected devices used by people, whether they are indoors or outside. Cellular carriers will be more important to us as Internet providers than as telephone companies.

Consequently, the FCC should be careful to avoid unintentionally granting the cellular industry a de facto monopolistic stranglehold on the Wireless Internet. Devices such as the iPhone should be provided alternate pathways into the Internet ether. Examples include unlicensed spectrum and White Spaces.

The booming success of Wi-Fi and BlueTooth illustrates how productive unlicensed spectrum can be when nobody is granted an exclusive monopoly to designated frequencies. Similarly, the ever declining cost of semiconductor technology suggests that embedded cognitive electronics can add considerable capacity to the Wireless Internet while simultaneously promoting competition. Some estimates conclude that 95% of licensed spectrum is unused at most any given time. Cognitive electronics could enable future iPhones to spontaneously identify such White Space and use it in a non-interfering manner under firmly established and electronically controlled protocols.

Second, “teleputers” shall become our chief gateways for communications, media access, commercial transactions, and information.

Consider media access. We shall obtain media via our “teleputers”, but choose from a variety of appliances for playback. For example, we’ll have several options for music. One is to listen through headphones. Another is to connect to a boombox docking-station.

Similarly, video might be displayed on a “teleputer’ screen. Alternately, it might be projected onto a white wall or screen by connecting the “teleputer” to a HD projector with a docking-station. A third way is to use Airplay and an Apple TV unit to “mirror” videos displaying on the iPhone directly onto the television screen.

In short, display and playback appliances, like TVs and stereos, will gradually evolve into “dumb” appliances controlled by the “teleputer” gateway device.

In conclusion, just as terms like “horseless carriage” were supplanted by “automobile”, it’s time to retire the “smartphone” moniker.

For example, he quoted Time-Warner Cable’s strategy chief, Peter Stern: “We’re basically a broadband (Internet) provider….As a convenience to our customers we (also) package and distribute television (programming)”.

Inside Digital Media subscribers got the word two years before Mr. Stern in our “Cable Operators Will Abandon TV” post and podcast on December 5, 2009. The viewpoint created a lot of flak at the time.

In short, we concluded cable operators would eventually abandon television service for two reasons. First, Internet services are much more profitable. Second, cable networks like ESPN will constantly pressure CATV operators to raise subscriber rates or accept lower profit margins.

Download two minute audio narration here.

We recommended that CATV managements begin to focus on providing increasingly reliable and lightning-fast Internet while preparing for the day when it would be wise to divest or spin-off the pay television service. Unlike you, Peter Stern was not an Inside Digital Media subscriber.
Similarly we’ve been pounding-away at the Wi-Fi cellular offload theme for at least eighteen months before Holman’s article. For more information, see our July, 2010 Mobile Bandwidth Crisis market research report.

We even pondered whether Apple should become a nation-wide Wi-Fi operator, six months before it was revealed (following his death) that Steve Jobs also thoughtfully considered the option. Unlike you, Holman Jenkins also fails to be one of our subscribers.

At Inside Digital Media we aim to discover tomorrow’s Digital Media leaders today. You can help by sharing your thoughts and experiences by replying here at our blog.

Thanks.

TV Station Incentive Auctions

Steve estimates it could be three years before TV station auctions actually take place.

Background. At the behest of the FCC, Congress is considering bills to permit selected local TV stations to auction their broadcast spectrum. The likely buyers are cellular operators like AT&T and Verizon. Presumably, most of the auction proceeds would go to the U.S. Treasury, but a minority fraction would be retained by the selling station.

Download 25 minute audio interview to iPhone, iPad, or iPod here.

Typically the seller would use the proceeds to continue broadcasting by sharing spectrum with another local TV station. Digital technology enables traditional analog TV channel band to broadcast multiple streams of digital programming. Selling stations could arrange to share their portion of the auction proceeds with a non-selling station in order to get access to the spectrum needed to remain a competitive broadcaster. Most viewers would be unaware that two competitors are sharing a single TV channel because cable systems would assign each a separate ‘channel’ on the programming guide.

Timing. Congress must first pass bills authorizing the FCC to conduct auctions. Presently the House and Senate have different bills. The Senate bill specifies that stations with channels 37 – 51 may participate at their own volition. To clarify, they may choose to participate, but are not so required.

Steve believes some sort of bill will emerge from Congress next year and thereby become an Act. Thereafter, the FCC must take into consideration comments from industry constituents and set the auction rules. This can be a lengthy process. The bottom line is that Steve thinks it could take up to three years to actually start the auctions.

TV Band White Spaces

Although TV Band White Spaces are often confused with incentive auctions, they are not synonymous. White Spaces technology uses cognitive electronics to enable devices such as smartphones and tablet computers to employ unused television channels based upon their present geo-location of the applicable device. The technology is officially authorized, but currently only incipient in the market.

The reason that White Spaces are confused with incentive auctions is because any action that removes TV channels from the TV Band, reduces the available White Space. While there are no technical reasons why TV Band White Space deployment cannot advance, some operators are reluctant to utilize the technology until they know with certainty which channels will be available after incentive auctions.

In sum, an ageless epigram – often falsely attributed to Bismarck — seems to apply: “To retain respect for sausages and laws, one must not observe them in the making.’”

Earlier this month the senior founder at Trilogy Partnership disclosed that Steve Jobs was originally seriously considering whether Apple could build a nationwide Wi-Fi network for the iPhone. Since Wi-Fi spectrum is unlicensed Apple could build its own network thereby avoiding the possibility that the iPhone user experience would be dependent upon cellular carriers. Presumably, with the iPad on the drawing board, Jobs could see that much of Apple’s future growth would depend upon the availability of reliable wireless service at reasonable fees.

Download 25 minute audio interview to iPod, iPhone, or iPad.

According to Trilogy’s John Stanton, who spent a lot of time with Jobs during iPhone gestation, “(Jobs) wanted to replace carriers. He and I spent a lot of time examining whether a new carrier could be created synthetically with a national Wi-Fi network using unlicensed spectrum.” Jobs eventually partnered with AT&T, partly because the carrier agreed to subsidize the iPhone subscriber costs. Nonetheless, Stanton concluded, “If I were a carrier, I’d be concerned about the dramatic power shift that occurred.”

Ulik and his company would be delighted for Jobs’ vision to come true. While the leading Wi-Fi access point makers concentrate on designs for indoor use — whether within the office or at residential homes — Wavion designs are intended to cover much larger areas outdoors with fewer units. Generally when used outdoors, Wavion access points can blanket a fixed region with far fewer units than required by conventional manufactures such as Cisco, D-Link, and Aruba, among others.

Wavion predicts the increasingly familiar Wi-Fi hot spots will evolve into “hot zones” covering both the indoor and outdoor areas of today’s hot spot locations. For example, gradually Wi-Fi access will be available throughout a shopping area, instead of merely inside the stores.

Wavion equipment is especially designed to minimize interference. When hot spots are mostly indoors, there tends to be little interference from neighboring networks. But once access points are put outdoors, devices such as the iPhone often detect many networks. Wavion has invested considerable research into developing algorithms that detect interference and constantly monitor the wireless medium to insure that the applicable device, such as the iPhone or iPad, is connected to the best access point.

There are two reasons for interviewing Nathan. First, I wanted to learn whether the traditionally rural Wireless ISP industry can compete in important city markets like St. Louis. Second, after meeting Nathan at a recent industry conference I felt that he had the ambition and ability to make WisperISP a much bigger company and I wanted to learn more about his plans.

Download audio interview to iPod, iPhone, and iPad

Since WisperISP has only 3,500 subscribers it has not yet demonstrated it can compete in the densely populated confines of St. Louis and its bedroom communities. However, Nathan’s growth has been entirely organic. He has yet to spend any money on advertising or marketing. Traditionally customers “discovered” WisperISP when they couldn’t get reliable broadband Internet access any other way. The satellite option has never been truly competitive in terms of reliability and latency minimization, and subscribers distant from a telephone exchange cannot get satisfactory DSL speeds.

But Nathan feels WisperISPs growth has also been constrained by a capital shortage. Original investment funds came from his personal credit card and subsequent investors were friends and family. WisperISP is now hopeful of getting a significant SBA loan next month. With the added capital Nathan will be able to expand more rapidly and even begin investments into marketing.

Nathan concludes that advancing radio technology will enable WisperISP to compete in more densely populated areas. He already offers service in a sixty mile radius around St. Louis and has economical Internet backbone connections within the city. By using the attractive St. Louis backhaul and increasingly economical and versatile access point devices, Nathan feels he will be able to compete with cable and telephone providers of Internet service. He already does so for about thirty percent of his subscribers.

Finally Nathan is interested in growing by acquisition. With WisperISP’s economical backhaul, he is able to acquire subscribers, improve the profitability and service by substituting WisperISP’s backhaul for the typically more expensive access used by smaller Wireless ISPs.

Whether WisperISP can achieve its ambitious goals remains to be seen. But I’d wager $100 against a good Cuban cigar that a young man who represented the USA in a fifteen mile International Open Water Swim Competition a dozen years ago is accustomed to achieving goals that most of us would consider unattainable.

I interviewed him for two reasons.

One is curiosity about the value of TV station spectrum in anticipation of the first-ever incentive auction that Congress is expected to approve shortly. Second, is to gain a better understanding of how licensed spectrum will become increasingly marketable as the Wireless Internet comes-of-age.

To download Bob’s audio interview to iPhone, iPad, or iPod, click here.

Congress is considering a proposal to grant the FCC authority to enable individual TV stations to sell their licensed channels at auction. There are three objectives. First, is to make more spectrum available to cellular carriers who are anticipated to be the principal buyers. Second, is to generate revenue for the Federal Government by presumably requiring that most of the proceeds go the to U.S. Treasury. Third, again presumably, is to enable selling stations to keep a share of the proceeds for themselves.

To understand why a station may want to auction its spectrum, consider the case of two competitive stations in a single geographic market. Owing to the adoption of digital broadcasting, each station can actually broadcast multiple streams of programming. Thus, if one station were to sell its licensed spectrum, the two could agree to share the remaining spectrum and continue to compete as two different broadcasters by using digital techniques to transmit multiple channels of programming in the spectrum remaining to TV station that did not sell.

Bob discussed the hypothetical case of an auction in a metropolitan area with a population of about two million, such as Orlando, Florida. He noted that the last time cellular carriers purchased spectrum previously set-aside (but not used) by TV broadcasters, the average rate was $1.25 “per-megahertz-per-pop.”

Each TV broadcaster has six megahertz of bandwidth allocated to the station’s channel. Thus the auction value of a station in a metropolitan area with a population of two million is calculated as follows:

Auction Value = (six megahertz) x (two million population) x ($1.25).

The resulting value is $15 million. However, it is assumed that the Federal Government will keep the majority of the proceeds to reduce the deficit. Assuming the station gets to keep a third of the value, the amount available to the station owner is only $5 million. Moreover, presumably he must spilt part of the $5 million with the non-selling station that will provide spectrum enabling the seller to continue competing as a TV broadcaster. However, “price-per-pop” might be higher than last time and growth markets like Orlando may get a premium. Nonetheless, Bob’s analysis provides a “ballpark” valuation.

The chain-of-events required before an auction can take place are (1) Congressional approval for the FCC and (2) a determination of procedures and rules at the FCC. Both can take a long time, although the proposal is expected to be “out of committee” shortly.

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G.A.W. is a particularly interesting for a number of reasons.

First, with 30,000 subscribers it is significantly bigger than the typical rural WISP which has only about 1,000 customers.

Download 25-minute audio interview to iPhone, iPad, and iPod here.

Second, the company provides innovative wireless services including large area Wi-Fi mesh networks enabling subscribers to move about campus areas and to stay connected to the Internet at much higher speeds than the typical cellular operator provides. A typical example is a condominium or apartment complex. Other examples are shopping areas such as downtown Brattleboro, Vermont.

Third, unlike the typical WISP, Josh competes in both rural and urban markets. Cities with G.A.W. service include Springfield, Chicopee, and Holyoke in Massachusetts along with Hartford and Enfield in Connecticut. Typically WIPS avoid markets with wired competitors, such as telephone and cable companies, but G.A.W. has proven it can compete effectively against entrenched competition.

Fourth, G.A.W. is leading the way in the WISP industry by striking partnerships with companies like Radio Shack and TiVo. Radio Shack is a G.A.W. reseller and TiVo is developing a joint IPTV offering with the company.

Fifth, G.A.W is rapidly growing. Josh is getting more aggressive in urban markets where the higher population density enables the company to accelerate its growth. It has been particularly successful in winning service contracts to multiple dwelling units such as condominiums and apartment complexes.

Sixth, Josh believes that technological and rapid price/performance improvements in base station and customer premises equipment will enable Wireless ISPs to move into even the biggest urban markets in the years ahead.

Seventh, G.A.W. has the management depth to accelerate growth by acquiring regional operators.

In short, Josh is a “man in motion.”

The reasons are precisely those discussed in our blog post six months ago entitled, “Should Apple Become a Wireless ISP?”

Download three-minute audio to iPod, iPhone, or iPad here.

According to Trilogy’s John Stanton who spent a lot of time with Jobs during iPhone gestation, “(Jobs) wanted to replace carriers. He and I spent a lot of time examining whether a new carrier could be created synthetically with a national Wi-Fi network using unlicensed spectrum.”

Jobs eventually partnered with AT&T, partly because the carrier agreed to subsidize the cost of an iPhone for subscribers. Nonetheless, Stanton concluded, “If I were a carrier, I’d be concerned about the dramatic shift in power that occurred.”

In our analysis, Apple simply cannot afford to let AT&T and Verizon choke demand for iPhones and iPads because of the carriers’ determination to impose increasingly obnoxious metered rates and usage caps. Cellular operators should appreciate that compelling research documents consumers hate metered rates.

A convincing example is ten-year-old research from AT&T Labs entitled “Internet Pricing in Light of the History of Communications”. The paper examined communications pricing over a two-hundred year period involving rates for (1) postage, (2) telegraph, (3) local landline telephony, (4) long-distance telephone service, (5) wireless telephony, and (6) Internet access. In every case usage was inhibited by metered charges, such as postal rates tied to the distance a letter was sent.

So long as AT&T Mobility and Verizon Wireless dominate the domestic cellular market, there’s not a saint’s chance at a political convention that they’ll back-off “consumption based pricing.” Monopolies characteristically substitute higher prices for business innovation. They’ll not change unless forced to do so by competitive forces.

Fortunately, Apple has the money to prompt such a change. They can build their own Wi-Fi network whenever demand growth for iPads and iPhones declines to management’s pain threshold. Presumably, however, Apple would prefer for Wireless ISPs – or others — to develop the market on their own, especially if flat-rate pricing is the standard.

In short, our obvious interest in the Wireless ISP industry that materialized during the past year or so, is largely in response to our conclusion that Apple and Android device makers simply cannot let the future demand for their products be strangled by a cellular carrier duopoly.

Any video on the new iPhone-4s, can simultaneously be displayed on your television. It’s a process known as “mirroring”, and it’s going to fundamentally change how we use our televisions. For example, through-out the day you may sample full length videos that you’d prefer to watch on a TV screen. Perhaps a friend told you about the video and showed you where to find it on the Internet. Perhaps she sent you a link via email. Whatever, the iPhone-4s lets you watch it on either the smartphone screen, or your television.

To download seven-minute instructional video click here, or watch stream above.

Here’s how it works.

First, you need an iPhone-4s. (Mirroring also works with an iPad-2 that has the IOS-5 operating system software.)

A second requirement is an Apple TV, which is a $99 cigarette-pack-sized appliance that connects to your flat panel television. Normally, the Apple TV is used to watch movies rented via iTunes.

Third, when you start playing the applicable video on the iPhone-4s, touch the “airplay” icon which will prompt a two-option dropdown menu. The default option is to watch the video on the iPhone-4s screen, but the alternate option is to display it on Apple TV. Choose the second option.

That’s all there is to it.

Mirroring is a significant advance for two reasons. One is that it will display whatever is on the iPhone-4s screen via the television – not just videos. Thus, it enables iPhone video games to be played on the TV. A second advantage is that mirroring is not limited to downloaded videos. It permits any iPhone-4s video – including those streamed from the Internet – to be displayed on the TV.

Today’s seven-minute video shows you how, step-by-step.

The company provides broadband Internet service to 2,500 subscribers in western Nebraska and eastern Wyoming. Instead of connecting subscribers with cable or telephone lines, Vistabeam provides service through its network of fixed wireless base-stations linking to inexpensive transceivers typically mounted on subscriber rooftops. It sort-of echoes an earlier era when television was received that way instead of via cable, fiber, or satellite. In short, Vistabeam is a typical rural Wireless Internet Service Provider.

Download thirty minute audio interview to iPhone, iPad, or iPod here.

While the uninitiated may assume Wireless ISP service to be slow and unreliable, Vistabeam is actually competing quite effectively with DSL and cable. The company offers speeds of up to 12 mb/s. As Matt notes, the typical Wireless ISP base station a dozen years ago had a capacity of 1.5 mb/s, whereas stations commonly available today can handle 150 mb/s. As with landline providers, Vistabeam is witnessing a marked increased in Internet Video consumption from YouTube, Hulu, and Netflix, among other sources. Yet its wireless system can handle the increased demands.

Although the FCC announced it wants to shift some of the funding for the Universal Service Fund (USF) from telephony to Internet services, Matt notes that Wireless ISPs have been providing such service successfully without any subsidy. Telephone companies collect about $8 billion annually for the USF in the form of fees on nearly everyone’s telephone bill. The funds are allocated to those telcos providing service in sparsely populated areas as an added subsidy to the monthly service bills paid by subscribers.

Matt notes that one telephone company in his service territory is collecting about $1.5 million annually from the fund in addition to fees paid for service by subscribers. The telco has only about 800 subscribers whereas Vistabeam gets no subsidy for providing Internet service to over three times as many subscribers.

During the past year Vistabeam started to deploy less expensive, higher capacity transceivers which will enable the company to keep up with the growing demand for Internet Video. Matt will also soon start deploying customer premises equipment capable of remote diagnostics as well as enhanced services such as cellular offloading.

Finally, Matt concludes that technological progress will enable Wireless ISPs to increasingly compete in more urban markets, especially if the incumbent cable and telco providers make it difficult for customers to get Internet access without also including a package of voice and conventional wired television services typified by “Triple Play”. For example, he noted that Wireless ISPs are active in both Omaha and Lincoln, which are the two largest cities in the state.

Download seven minute audio narration to iPod, iPhone, and iPad.

One hundred and fifty years ago next month the United States military took deliveries of its first repeating rifles. Manufactured by the Spencer Repeating Rifle Company of Boston, each seven shot weapon could fire at least three-times as many bullets per minute as the most proficient soldier armed with the standard muzzle-loading weapon.

Nonetheless, until the end of the war more than four years later, Union armies standardized on single shot muzzle-loaders like the Springfield and Enfield. By the end of the war only 65,000 Spencers were issued as compared to over a million muzzle-loaders. It was probably the war’s biggest mistake because it unnecessarily prolonged the fighting.

The result was over 600,000 soldier deaths. That exceeded American deaths in all other wars, including World War II. In point of fact, if the Civil War soldier-death-ratio were applied to the nation’s current population, comparable deaths would total over six million.

Timely deployment of repeating rifles would likely have ended the war much sooner, with far fewer deaths. The Spencer, and the competing Henry repeater, were both patented prior to the war. (The latter would evolve into the cowboys’ signature rifle, to wit, the Winchester ’73.) Since both were invented in New England, Confederates would have been unable to get them and would have been forced to promptly surrender.

As explained in Allergies to Innovation, the principal reason the weapons failed to be quickly deployed was bureaucratic inertia. At least twice President Lincoln tested Spencers and favored adoption. The blocking factor was Ordnance Chief, General James Ripley. His objection – and I’m not making this up – was that repeaters would encourage soldiers to waste ammunition.

The principal reason Spencers ultimately started to be deployed is that a brigade commander from Indiana had his troops purchase them independently. After the brigade proved the weapon’s effectiveness, the Army gradually began to deploy Spencers.

As if it were haunted by a bureaucratic ghost, today’s FCC is sustaining monopolies and impeding progress by a similar failure to recognize new technological realities.

First, they are utilizing a nearly century-old method of managing bandwidth and avoiding signal interference over the nation’s airways. Specifically, they continue to rely almost entirely upon granting exclusive frequency allocations to authorized users. Some, like broadcast TV stations, get their allocations for free. Others, like cellular carriers, pay for their allocation in competitive auctions. Whether by grant, or auction, the result is that spectrum ends-up in the hands of companies that have little incentive to innovate because nobody is allowed to compete in their frequency bands.

However, when slices of spectrum have been allocated for competitive – meaning unlicensed – use, innovation has been almost stunning. Ubiquitous Wi-Fi and Bluetooth devices are two compelling examples. They use embedded cognitive electronics to avoid signal interference and traffic contention, instead of exclusive spectrum licensing.

Another case in point is the fixed-station Wireless Internet Service Provider (WISP) industry, which shares spectrum with billions of Wi-Fi and Bluetooth devices. Many experts claimed that WISPs couldn’t provide reliable Internet service. It was argued their use of unlicensed spectrum would lead to a “tragedy of the commons” whereby overuse of a public resource would lead to service degradation as more subscribers came online.  Instead WISPs have employed resilient system designs, clever engineering, more efficient modulation, and higher gain antennas to steadily improve service to over two million domestic subscribers. Almost three-fourths of the land area of Texas is covered by WISPs as is nearly forty percent of Illinois.

In 1999 total capacity of the typical WISP fixed wireless base station was 1.5 Mb/s. By 2011 the capacity of common base stations has grown to over 150 Mb/s. A cluster of base stations on a tower can typically deliver several hundred megabits of bandwidth over a five-to-ten mile radius.

A second way the FCC is hidebound to an outdated tradition involves the $8 billion in fees collected annually on consumer telephone bills for the Universal Service Fund (USF). Money from the USF is available to (mostly) telephone companies to subsidize telephone service to rural regions of the country where it would otherwise be uneconomic. Earlier this year the Commission indicated it would like to authorize the fund to use the monies for subsidizing rural Internet service as well,

Since Internet service can use Voice-over-IP to also provide telephony, it’s sensible to free the fund from exclusive commitment to traditional telephony. However, a bigger point is that WISPs have demonstrated over the past fifteen years that competitive participation through unlicensed spectrum is the most effective way to get Internet service to rural subscribers without any subsidy. In short, the availability of open spectrum is more valuable than the subsidy. Yet, as presently structured, the subsidy would be largely limited to the monopolistic telephone industry. In today’s economy consumers are pressed hard-enough. There’s no reason to require them to donate $8 billion annually to pay telephone companies to undertake projects that WISPs are already doing without any subsidy.

In short, the FCC should gradually trend away from granting or selling exclusive frequency access in favor of a new policy of open access that relies upon the cognitive abilities of embedded electronics to automatically avoid signal interference and manage traffic contention. The White Spaces initiative last year was a step in the right direction, but the Commission has muddied the waters by proposing to “take away” unspecified bands in an auction repacking of the TV bands.

Download video to iPad, iPhone, and iPod here.

Future televisions will be nothing more than wireless display stations. No longer will they be the control center for our home video entertainment. In a Slave-to-Master role reversal, hand-held units shall become the gateways.

Let met explain.

In the future, we’ll access content on portable devices, such as smartphones and tablet computers, and choose to display programming on whatever screen is spontaneously most convenient. If we’re in a restaurant for lunch, we’ll likely select the smartphone screen. While sitting in a comfortable upholstered chair with a tablet computer, we’ll likely use the tablet screen. But if were in the TV room, we’ll simply instruct the applicable smartphone or tablet computer to display the video on the television screen.

It’s already happening for those with home Wi-Fi networks. Characteristically, Apple is leading the way. 

Only two devices are required. First is an iPad-2, or the recently introduced iPhone-4S. The hardware should include the latest version of operating system software, termed IOS-5. Second, is a $99 Apple TV, which is a cigarette-pack sized unit that connects to a television via HDMI cable.

A user option permits the iPad-2 or iPhone-4S to simultaneously “mirror” whatever is displayed on its screen onto the TV screen. The connection is made wirelessly via the Apple TV into a conventional flat panel television. For fast moving video it’s best to employ the latest dot-11n version in the applicable Wi-Fi network.

More significantly, mirroring induces an unexpected role reversal for television, with radical implications for the industry’s future. Television will no longer be the central access hardware. Increasingly portable units such as smartphones and tablet computers will become the popular access devices. They enable us to acquire desired content more readily because we carry them around with us thereby permitting more impulsive content acquisition. For example, evening commuters can rent iTunes movie selections while riding trains homeward. After dinner they can watch them on TV screens merely by mirroring from their iPhone-4S, or iPad-2.

Yet mirroring is even more powerfully transformative because it is not limited to conventional video. For example, video game fans can mirror from iPad-2’s and iPhone-4S’s onto TV screens as well.

Although I’ve long believed that TV screens would ultimately transform into giant computer and Internet display monitors, I didn’t suspect that the much smaller smartphone and tablet computer screens would transform into a form of dominatrix. But if evolution and the extinction of dinosaurs teach us anything, it’s that the biggest and strongest species is not necessarily the one to survive. Instead it is the species most adaptable to change.