Botched Android App Store Launch

Google is at risk of laying an egg with their botched launch of paid apps in the Android app store. The fur is flying in the app developer community, with many claiming to shelve or cancel development on the platform. To add insult to injury, they've gone into almost total public relations lock-down, refusing to even speak to anyone, including Android phone users and developers. How could they have gotten this so wrong.

As I have hinted in the past, I am involved with a company that has already published an Android app (it's doing pretty well, but then it is free), and we have plans to get into paid apps as one aspect of our business. This latest fiasco is worrying. Android is a truly open platform (thanks, Google) so there are alternative app stores that do not have the problems that Google currently has, but they also do not have the brand recognition or (yet) seamless integration with the phones. One aspect of being a small app developers is the value of riding on the coattails of that brand (just like Apple and the iPhone), which can justify the hefty 30% cut of revenue the brand demands.

Here is a list of the problems I know about. This is all second-hand so some of it may be unreliable even when reported by multiple sources. Paid apps are at present restricted to US and UK companies, and since we are in Canada we have no direct experience to report on (yet):

• Google Checkout: Used by few, supports very few countries and currencies. This constrains the addressable market.
• Currency: Apps are priced in the developer's home currency. Many individuals do not know currency exchange rates and are understandably cautious when faced with prices in foreign denominations. There may also yet be a backlash when they see exchange rate premiums on their credit card statements. In business it's always the best policy to price products in services in the customer's currency, and manage currency risk themselves.
• Trial period: Lots of confusion here and potential Google Checkout violation of their own terms. Game developers in particular are getting high returns since many users play with the game for 24 hours (and even longer, especially over weekends) then return it for a full refund. It is further unclear if the user can repeat the process ad infinitum.
• Copy protection: Breaks free and paid applications almost every time. Further, the method of protecting apps is so weak it is fairly easy for users to extract the application from the phone and do what they wish with it.
• Blame shifting: When problems are reported, T-Mobile directs users to the developers, and Google itself ignores complaints, while its written terms implicate the developers. Users and developers are both losers in the short term. Long term, if customer service isn't addressed the entire Android application eco-system is at risk.

A lot of these problems appear to be due to Google's decision to only support their own payment service, Google Checkout, rather than the more mature systems like PayPal. Near-term this has many problems, though it may work out in the longer term. It could in part depend on the transaction fees since there is a lot of overhead with PayPal, especially with transaction charges and currency exchange rates. From the numbers I've seen, iPhone developers probably see a 60% take of the revenue rather than the top line 70% advertised.

Everyone is waiting to see how Google works through these issues, and if they begin to open the lines of communications. The carriers themselves are looking at getting into the app store business, so they can expect some formidable competition if they don't use the next weeks and months to clean up their act. From my own perusing of the available paid apps, sales have been uniformly poor, and complaints about the problems by users has been discouraging. The clock is ticking.

Controlling The Phone - Part 8: SMS

In the previous article of my controlling the phone series I said I'd cover VoIP next. I lied. To lay the groundwork for VoIP I realized I would first need to cover off SMS (Short Message Service). So that is the topic of this article.

Some folks may think I'm going to talk about telco tactics to charge for use of SMS, sometimes at what are considered to be extortionately high prices. That is only a symptom of what I believe is a larger issue, one where SMS is merely one manifestation of a more fundamental technology strategy on the part of the telcos. To get there I will first need to briefly recap the concepts of push and pull services. I will then narrow the topic further by focusing on push and pull services on mobile phones, which ties in to my previous two smart phone articles in this series.

A pull service is one where the communication is initiated by the user. Click a hyperlink and open a web page - that's pull. Open the iTunes store to shop - that's a pull service. Make a phone call - that's also a pull service. If you were previously unfamiliar with the meaning of push, that's all there is to it.

Push services are a little bit different. These are where another party initiates communication with you. Receive an SMS - that's a push service. Someone phones you - that too is a push service. Someone sends you an instant message - that is... ok, here it gets a little more interesting. You might think that IM is a push service, but that is only partially true. To a user it looks like push, yet at a deeper level it isn't; IM is a pull service. Let's look at this more closely since this will get to the root of how the telco controls your access to services, and protects their revenue.

You (obviously) use the internet. Like the majority today you likely have broadband at home. You also almost certainly have a firewall, perhaps even more than one. The firewalls in current products are so transparent and ubiquitous it is possible for you to be unaware of their existence. They're in Wi-Fi devices, routers, and are also packaged with your computer's operating system. They are there for your security, and they do just that. They also do more that just protect you and your computers from a mess of nastiness out in the wild, wild internet.

The most basic function of a firewall is to prevent outsiders from getting to your computer. Your ISP assigns you a unique IP address, which can be static or dynamically-assigned when you connect, and that address allows anyone to send data to you. This isn't good. To prevent this the firewall rejects connection attempts from outside the firewall. If you initiate a connection from inside the firewall, from your computer, that is allowed. With that connection (pinhole) established, the other end of the connection is able to send data to you. This keeps you in control, so it is your fault if you connect to something you ought not to!

The far party is most often a web server (accessed by typing or clicking on a URL in your browser), an e-mail server, a DNS, and so on. The point is, the firewall ensures that only you (or, more precisely, your computer) can initiate connections.

Technically there is a little more to this picture, but there is really one detail I need to cover: NAT, or network address translation. Using NAT, the firewall "hides" your computer by giving every connection an unpredictable (to outsiders) port and IP address combination. The firewall translates these addresses for every packet flowing across the firewall in either direction. It does no one any good to know your IP address since it is inaccessible, and is often not even unique in the wider internet.

Now we can finally get back to the focus of this article, the smart phone. There is a firewall in the network through which all your data traffic flows. This frees your phone from having to provide a firewall, which is still a burden for these small devices. It also keeps a lot of traffic from undesirables from wasting the costly radio spectrum by just bouncing off every smart phone's own firewall. While you may not realize it there is actually quite a lot of traffic from IP scanners and probes on the internet on the hunt for vulnerable computers. A network-based firewall protects both your phone and the airwaves.

The other good thing the network firewall does is avoid IPv4 address space exhaustion. Billions of cell phones are a lot for IPv4 to deal with. With NAT the telcos use far fewer IP addresses than they have subscribers. IPv6 will solve this problem, if it ever gets into wide deployment, but for the present NAT conserves the address space.

The network firewall has a more nefarious use, and that is at the heart of how the telco can control your phone. Remember, you, as the phone's user, must be the one to initiate data (IP) communications. This may seem unremarkable since it is no different from the situation you have at home. However, mobile phones do not share the same attributes as your home PC. The key differences are battery life and data pricing.

Recall what I said about IM - it is really a pull service. The reason for this is that your IM phone app must register with, and remain connected to, an external server located somewhere on the internet. That communication is initiated by you, via an IM app, and must be persistent. Only then can your IM buddies get messages through to you, using that server that has an open connection to your phone. While this attribute makes IM seem like a push service, it was you who made (pulled) the connection to the IM server.

Using IM like this is a terrific way to run down your battery, and run up charges with your carrier. All cell phones are designed to drop into a low-power (sleep) mode when user activity stops. When asleep in this way it is difficult to maintain connections over the internet. Low-level timers at the server and in the network firewall will drop connections unless there is active traffic. Further, while the phone is asleep the IM app may be unable to listen for incoming messages (this is very dependent on the software platform). Therefore the phone must be awake for reliable IM operation. The computers inside those smart phones use chips with admirably low power requirements, but not low enough. Keep that computer whizzing along and it will die with a few hours of what you might consider inactivity.

There is also the expense of data to keep the server connection open. It doesn't take many bytes of data to hold a connection open in most cases, but it is persistent and it does add up. This is more acute in Canada where we still have some very expensive data rates in comparison to most other countries.

Admittedly, this is a lot of words to make a few small, but important, points, so hopefully you're still with me. If you are, by now you should be wondering how the phone can work at all since clearly the phone must be awake to be available for those basic push services of receiving phone calls and text messages. The phone is obviously on and not asleep with respect to those services. Am I being inconsistent in my arguments? No. Let's see why.

First, phone calls and SMS do not pass through the network firewall. For those services there is no firewall, nor for that matter is there a need for one. The reason is that neither uses the internet; they use the telephone network, which is closed to the outside world - it's a telco-only domain. The core network is still SS7 for the most part, just like what is behind your wired home phone. Even this is evolving to IP, but this modernized network remains unassociated with the internet for the present. Therefore, with no firewall there is no restriction against push services. There is no security issue (really!) since it is only the telco that can use that channel.

Second, the computer side of the smart phone is uninvolved in the reception of phone calls and text messages (you can refer back to the internal structure of a smart phone in this earlier article). These tasks are accomplished using other chips, in firmware, that are common to all cell phones, not just the new, smart variety. Power requirements are very modest and in standby (no calls or messages) can go for many days without recharging the battery. It is only when there is an incoming call or message that the firmware pokes the computer to wake it up so the phone app or SMS app can go to work.

These are advantages that no third-party app on a smart phone can ever achieve. It is why the telco keeps the ability to control the phone, and therefore many revenue-rich services. It is why they can get away with driving up prices for SMS - no third party IM app can achieve equivalent availability and performance. As you may have heard, Twitter went so far as to cancel SMS notifications to Canadian users of that popular service as SMS prices continued to rise. IM still isn't a viable replacement for most users, except those who anchor their suddenly not-so-mobile smart phones to a wall charger and use Wi-Fi instead of 2G/3G data service. Of course that's also why carriers, who still mostly control distribution of the smart phones, go to some lengths to hobble the Wi-Fi functionality of the iPhone among others.

If you're starting to think ahead I suspect you can now see why I chose to cover SMS before VoIP. VoIP, for sure this time, will be the topic of the next article in my series on controlling the phone. Look for it sometime next week if I'm not again distracted by business responsibilities.

Clean Tech is Just Tech

Earlier this week there was a panel discussion on Clean Tech that was sponsored by Deloitte and LaBarge Weinstein. Clean tech isn't the tech that directly interests me, however I thought it would provide me with some perspective on how the venture capital firms see the space. So I went, hoping to learn something. What I learned is that the funding and market situation is no different there than for the types of technology in I which I am involved.

The crowd was large and the subject matter timely, so I expected a dynamic discussion. I was to be disappointed. The moderator, Duncan Stewart, tried to inject some life in the proceeding, as did a couple of the panelists. Yet there was, ultimately, little animation. Two of the panelists, Rob Koturbash from Maple Leaft Angels and the speaker (whose name I didn't catch) from Growthworks were so down beat they put a damper on the proceedings. Despite their investments in companies in clean tech they were entirely unenthusiastic. The fellow from Growthworks couldn't remember the companies in their portfolio without reading from his "cheat sheet", a tiny scrap of paper.

Better were Antoine Paquin and Tom Astle, respresenting late stage venture capital and public markets, respectively. Even with their lively attitude they did little to encourage the audience. I expected more, even to see them go so far as trying to entice entrepreneurs into the space. Didn't happen.

What I did hear loud and clear were apologetics for how difficult it was to get any ROI (return on investment). How they framed this could be summarized by this statement (not quite verbatim):

Cycle times in clean tech are longer than other tech.

I don't believe it. Sure there are companies researching new technologies, such as iogen and Group IV, but most companies are just applying regular technology to a new vertical. In contrast, Ottawa cut its teeth on a different vertical - telecom. Remember, we're not talking about developing alternative fuels in most of these companies, but stuff like LED lighting, smart meters, and software-driven control systems. Nothing here is trivial but there is no justification for the long cycle times.

The message about longer cycle times was therefore lost on me. When they used that line I instead heard something along the lines of the following:

There are no public market exits or acquisitions happening for the forseeable future.

This is my caricature of the situation though I believe it's accurate enough of a characterization. That is, the situation is no different for clean tech than for any other tech that requires outside investment. There are no exits; and, if there are no exits there is no investment. The problem is the overall market and macro-economic, which are all bad and affect all sectors.

Out of curiosity I made a conjecture that I believed to be true and quickly pulled together some US ticker symbols of currently-trading stocks in the clean tech space. I plotted them against USO, an ETF that is a pretty good proxy for crude oil futures. I expected a correlation and that's what I saw, though not a perfect correlation. This is not a proof of anything; it is possible the result could be quite different with other selections, or even better had I taken some additional care in my choices. These were just the names that came to mind as I entered them into Google Finance.

Clean tech, including alternative fuels, tracks oil. If oil is expensive there is interest in clean tech. With oil way down, the interest is gone, as is the money to invest in new ventures. When it comes to the financial realities, clean tech is just tech, and they share the same fate.

Spectacular Improbabilities

In the past few days there were three stories of improbable events, two catastrophic and one that was potentially catastrophic. They were widely covered so you would almost certainly be familiar with them: plane crash, satellite collision, and submarine collision. While there is much of human interest in two of these stories, there is a common thread running through these separate events - probability - that always catches my interest.

First, there was the human tragedy near Buffalo. In the weeks and months ahead there will be painstaking work to reconstruct in excruciating detail the events leading up to the crash, and, importantly, to learn lessons to be applied in future. This should lead to increased air safety, which is already extraordinarily safe. It's gotten so safe in part through similar learning in past tragedies.

I can still remember a time when news of a plane crash would lead many people to a renewed fear of air travel despite the statistics of just how safe it was in comparison to alternatives. To me it seems novel that there is little of that today. It may be that the general population has finally understood this fact, that it is highly probable that when you get on an aircraft you will arrive at your destination safely and ready to complain about all the petty annoyances of modern air travel. The reaction is so muted that articles like this one in the Ottawa Citizen seem almost superfluous.

So, the likelihood of an air crash is low, especially in this part of the world. That's what makes it safe. However, there are many flights and passengers and so these tragedies happen with some regularity. Keep that thought in mind while I go through the next two events.

The second catastrophe involved no humans except for, perhaps, insurance underwriters, since it occurred in Earth orbit: the collision of an Iridium communications satellite with a decommissioned Russian military satellite. While this is a wildly improbable event, it is very probable that such an event was due. In the words of Douglas Adams, "space is big, really big," yet with the vast quantity of satellites and their detritus in orbit these collisions will occur.

Up until now the likelihood of a satellite collision in any span of time has been lower than for air crashes. This situation will continue for some time since air travel is getting safer, and for now at least traffic loads are down, even while the quantity of junk in orbit is increasing. I can imagine a time within a couple of decades when those lines of probability will cross and satellite (or debris) collisions will have the higher frequency. Luckily there are few humans in space right now, and they're in one location, so the chance of a human tragedy will remain low for some time. Some day this could change.

The third event, the near disaster, was that curious collision of submarines in the Atlantic Ocean. At first glance this has to be the most improbable of this set of events; there are few submarines and lots of water, and they're being steered by humans. This has even been part of the public relations from the navies involved:

“It's an absolute one in a million chance that the two submarines were in the same place at the same time,” said Lee Willett, head of the maritime studies program at the Royal United Services Institute, a London-based military think-tank. “There is no precedent of an incident like this — it's a freak accident,” he said.

Luckily there was no serious damage so it seems almost comical: two vessels with technology to evade detection manage to bump into each other.

Of course this last event is not quite as improbable as stated above since submarines are not randomly distributed over the surface (and depth) of the ocean. Indeed, this is not an isolated event, as Willett claims, and as is detailed in this New York Times article:

Military experts said there were a number of collisions between western and Soviet submarines during the cold war. In 1992, an American nuclear submarine, the Baton Rouge, was struck by a surfacing Russian submarine in the Barents Sea.

Unfortunately I don't have a suitable quote handy, but supposedly the reason why these collisions are not uncommon is that subs tend to closet themselves in the same areas, areas suitable to their covert or hidden activities, and which are far smaller in volume than the ocean.

The same is true of satellites. They are not randomly situated in space, but instead occupy similar orbits that are optimum for their intended applications. This is similar to the situation with the subs, and further explains why satellite collisions can happen. Unlike the situation with subs, and aircraft, the probability of disasters climbs after satellite collisions since the debris clouds occupy a greater volume than their original, intact, form, and even a single bolt at the high velocities involved can ruin someone's day.

We have made improbable events likely by making a multitude of "attempts". Just like with the lottery, it is very improbable that you will win but very likely that someone will win. So it goes with satellites and aircraft, and even it seems with subs.

Unwelcome Software

In the past week I found myself extracting software from my computers that I had neither explicitly installed nor would I have if I knew what they were. The source of one of them was a surprise - Google - while the other was less of a surprise - Microsoft.

Having come from the software side of the technology business, and having done a bit of inappropriate hacking in the distant past, I am very suspicious of software surprises. I occasionally look around for misbehaving processes when anything about performance seems odd, or just because I get suspicious for no discernable reason. It would be fair to say that my behaviour is not typical of computer users, which these days includes nearly everybody.

Let's start with Google. Little did I suspect when I installed their beta Chrome browser (just to try it out) that it included a persistent process that is always running: GoogleUpdate.exe. As I read up on what it was I became uncomfortable despite not being particularly ill-disposed toward Google. It can be removed with a bit of rooting around and Chrome doesn't complain about its absence. Apparently this is not always true. The same Wired article I linked to provides a few reasons for us to be uncomfortable. Many people would think my reaction to this software verges on paranoia, however I will not tolerate uninvited software on my computers, especially when I do not have control over it.

The other case is that of Microsoft. A recent automatic update on a Vista machine installed a .NET 3.5 WPF extension into Firefox. That one caught me by surprise. I found it when Firefox next started and warned me. I then made a mistake that perhaps most people would make: I failed to select the uninstall option. In that moment of uncertainty I decided to go with the flow and check it out later. Big mistake. That Microsoft extension actually disables the ability to uninstall the extension. That is deliberately evil, and I don't care whether or not the software itself is harmless; it's as if someone just barged into my home and then chained and padlocked themselves to a support beam. All because I innocently opened the door to someone I thought I knew when the door bell rang.

Despite this nasty attribute of disabling uninstall, that bit of software is now gone as well. That took a little bit longer to achieve than the Google updater. It's good that I'm pretty fearless when it comes to getting my hands dirty under the hood of the operating system since this is not a job for the queasy or non-confident, although I consider it straight-forward.

My recommendation is to not trust software that shows up uninvited, nor the company responsible for it. Shoot first and ask questions later. Too much of my professional and personal life is dependent on reliable and trustworthy software. Have a look on your computer and see what there is to see. You, too, may be in for a surprise.

You'll notice I have not provided instructions (or links) to deal with the unwelcome software I described. If you are interested in pursuing this it is easy enough to find all you need to know with a simple internet search. Should you wish to get rid of this stuff, even if only because you are a paranoid like me, but you are not certain of your ability to do so, find someone to help. Done right it only takes a few minutes. Do it wrong and, well, be sure you have some backups made in case of disaster.

Technology and Legislation

It has long been understood that the law and technology do not mix well. I mean this in the sense of legislation. You can bet that when government legislation explicitly dictates use and abuse of specifically-named technologies and technology-based products, it will be wrong. I was reminded of this recently by stories about new laws that target cell phones.

Have a look at this draft legislation before the US House of Representatives. If you follow the news you may have heard about this already: a law to have cameras in cell phones make an audible click sound when they snap a picture. The intention is to protect privacy in locations that are considered safe, like locker rooms, and abuse of that privacy that can cause harm to others. The intention is good. The problem is with the bill mentioning a very specific technology: camera phones.

Consider other picture-taking products, and especially cameras. If I have an old-style film camera with a quiet shutter, despite being mechanical, I can supposedly use it without violating this draft law. How about the camera in my laptop? Presumably that's also not prohibited. I can also imagine seeing cameras in more and unlikely devices in the near future, perhaps even in a pen or shirt button. Should those be prohibited as well? You might think so since it is within the spirit of the bill's objective, yet it is bound to miss products that are not yet on the market or widely available.

Here is the nub of the problem: legislation always lags technology. How could it be otherwise. Lawmakers have to see the technology before they can discuss it, and in particular they need to see it in use. It is not because they are idiots, but rather because few if any can correctly predict how products incorporating new technologies will get used once they are released into the wide, wild world we inhabit. Even technology futurists get it wrong all the time.

This particular law is in the same mold as the cell phone while driving bans that are sprouting up everywhere. Why, many ask, is this one distraction picked on by lawmakers rather than all the rest, including people who eat or rummage through a batch of CDs while navigating traffic. Are they targeting a technology because it is new, and anything new is looked on by many, especially the non-technologists that populate our parliaments and legislatures, as somewhat threatening from the perspective of their more conservative bent? This also comes up with video games and the supposed harm they cause to children. (Stories about all of these examples frequently come up on sites like Techdirt, so you can hunt there if you want examples.)

Despite all of the above, there is one good reason to name technology products in the law: enforcement.

It is easier to convict on the basis of use or presence of a named device rather than on the behaviour of the accused.

I talked about this last year regarding driving with a cell phone. A police officer can cite a motorist for using a phone while driving and have excellent prospects of a conviction. This is not so if the charge is careless driving or negligence unless there has been a disastrous outcome. The same can be said to be true of click-less camera phones versus proving in court that someone's privacy or expectation of privacy was violated. As for video games, better, the politician thinks, to ban or restrict those with violence or sex rather than attempt to prove there is real harm.

The same thinking often appears in telecommunications, which is where I have a more particular interest. One of the latest is the use of P2P. Lawmakers are all over the map on this one, with some thinking that banning P2P entirely is a good thing so that inappropriate use is reduced or prosecuted, despite the impact on appropriate use. Again, it's a matter of targeting technology rather than illegal use of the technology because it's easier to convict on possession than on inappropriate use.

Not all is muddled in the intersection of law and technology. I am familiar with laws in the telecommunications field and elsewhere that do work. Examine this extract from the US Telecommunications Act of 1996:

SEC. 251. (2) Interconnection.-- The duty to provide, for the facilities and equipment of any requesting telecommunications carrier, interconnection with the local exchange carrier, network--
(A) for the transmission and routing of telephone exchange service and exchange access;
(B) at any technically feasible point within the carrier's network;
(C) that is at least equal in quality to that provided by the local exchange carrier to itself or to any subsidiary, affiliate, or any other party to which the carrier provides interconnection; and
(D) on rates, terms, and conditions that are just, reasonable, and nondiscriminatory, in accordance with the terms and conditions of the agreement and requirements of the section and section 252.

Now that's how you write a law in regard to technology! Notice that there is no reference to technology at all, just a strong statement of relativism in regard to technologies that compare with what the carrier has and offers in a way that they cannot impair their competition. Imagine if they had named SS7, tin cups and string or anything else. We and the carriers would still be locked into the technology of the 1980s.

What is interesting is how Congress got this right when lawmakers, including the same Congress, often get it wrong. The difference between this case and the thundering dismay over cell phones is that there is a regulator, the FCC, that is largely competent in the technology and was in a position to direct the writing of the bills. Without that type of backing expertise the lawmakers are adrift in an unfamiliar world and so get buffeted by the loudest and most convincing voices. In Canada the CRTC is perhaps not in the same position as the FCC but they still manage to do moderately well much of the time.

The same approach can be taken with other technologies. In this time of global warming, the better way to reduce carbon emissions is when the laws phase in reduction targets in selected sectors and let companies and individuals figure out how to achieve those targets. Legislating specific technologies, whether it be catalytic converters, alternative fuels or industrial scrubbing, is sure to lag the march of technology and thus often prevent or delay the use of better choices.

The issue of legislation and technology will never go away. We can only try to make the right choices at the right time.

Stimulus is Stimulus

Let's see... there's Conservation of Energy, Conservation of Momentum, there's even Conservation of Information in the form of quantum states, so how about the Conservation of Money. When you attempt to stimulate the economy by injecting $1 you get... something. But what?

I believe I first wrote on this curious topic back in the fall in the wake of the federal election. At the time there was lots of talk about $300M wasted on the election. As I argued then, it was not wasted. While it could be validly argued that the money was misallocated, it was not wasted. The government took $300M from us, the country's generators of wealth, and plowed it right back into the economy. It was $300M out and $300M in: netting zero change, or thereabouts.

It was a timely topic as the economy went into a nose dive almost immediately afterward. That started the global debate over government stimulus spending. In turn, major corporations everywhere lined up to claim their share of the stimulus money. Some of this behaviour is disgusting while others are merely comical. Yet if there is to be government spending it does have to go somewhere.

In this light I quite enjoyed this article in the Washington Post by Steven Pearlstein. In a concise article he clearly ridicules the attitude, and understanding, of some of the politicians in Washington. The US situation is certainly important to Canada, but the points he makes are equally applicable to our own politicians.

His view, as it is with what I believe are the most sensible of the analysts and participants, is that stimulus is stimulus: if the government spends, no matter where, even on ethically questionable projects, it still stimulates the economy. If you spend it in the wrong place it still ends up in the right place, eventually, since the first people in the handout line spend it elsewhere in the economy. Money circulates, it does not disappear.

It's really the joint issues of appearance and effectiveness. No politician wants to be seen to be spending money foolishly, no matter whether it is appropriate to the ultimate objective. More importantly, if the money is placed wisely it may be possible to accelerate reinvigouration of confidence and economic activity. For example, is it ethically appropriate or effective to give money to automobile manufacturers in light of their many years of mismanagement? Giving them money does not generate economic activity. It only keeps their creditors at bay for a while longer. The hope is to tide them over until the economy recovers (fingers crossed) and people start buying cars again. It would then have to be their cars that people buy, not the cars of the more successful manufacturers. Is that likely?

The dreadful thing about this way of spending money is that it does not generate economic activity. If there's no car buying going on, they will still close plants and continue to send workers home. Wouldn't it be better to place the money in the hands of those who would buy cars if they could? That would generate economic activity. Of course they (we) may not buy the cars of the failing companies - after all, that's why they're failing - but they will buy cars, and that's what we want.

I don't know if all this massive public spending, and debt, is the right solution - I'm not that smart - but if we're going to do it we should do it the best way possible. By best, I mean put the money in the hands of those who will put the money to work by generating demand for goods and services. If we don't do that we may as well sit on our hands and wait for the US to get their own house in order and start buying our stuff again. That is a strategy that doesn't appeal to me at all, but it seems to be uppermost in the minds of many of our politicians.

We need to invest in a way that will generate activity in sectors not reliant of the US' renewed appetite for our commodities. Perhaps that includes technology, though perhaps I'm talking out of self-interest. However I feel strongly that is better than putting the money into GM since it gives us the chance to create something new with global appeal. I admit this is a gamble, but I'd rather that than betting on a sure loser.

Controlling The Phone - Part 7: Inside the Smart Phone

I left off Part 6 in this series with a promise to delve deeper inside the smart phone to see how the idea of a demarcation point is becoming distributed, and therefore more complex. Simple cell phones, as I have shown, have a fairly-clear demarcation point: the SIM card. With the new generation of smart phones we must go beyond the SIM card. In keeping with my broad theme, I will focus on how smart phone presents new challenges for telco control of the phone.

A smart phone is a general-purpose computer, just like your PC but with outer constraints determined by its size, both physical and in its components, and with its dependence on the network. Perhaps a closer comparison can be made with an appliance exemplified by Microsoft's Xbox game console since it is a general-purpose PC wrapped inside a box that makes it seem like a special-purpose appliance. If you can somehow unwrap that box you will find that computer in there. Many hackers have done just that, much to Microsoft's dismay. This type of game is not restricted to the Xbox, since you can do it with Apple's iPhone and phones utilizing Google's Android, among a growing list of others.

That computer wrapper is very important to telco, permitting them to control your use of the device. However, before we go further let's take apart the smart phone into the component blocks that I believe are most relevant to my topic. These are, roughly:

• Applications
• Software platform
• Hardware platform
• Radio transceiver
• Network

The network is of course not part of the physical device, yet since it cannot be avoided in this discussion I include it as one component among the rest. We'll start in the middle of my list and work outward from there.

The hardware platform is the real enabler of the smart phone. There is some wonderful technology in there that I am going to almost entirely as irrelevant to this article. The important part is its interfaces to the software platform and the radio transceiver. The interface to the software drives the partnerships between phone manufacturers and software platform vendors. Sometimes these partnerships are manufacturer driven (Nokia in the case of Symbian), sometimes they are software platform driven (Microsoft and Google), and can also take the shape of broader associations (Open Handset Alliance). We also must add to this mix the telcos, since they greatly influence the business dynamics among the players by leveraging their control of the distribution channel to consumers.

The interface between hardware and software is a focal point since it determines, through the facilities it makes available, what the software platform can and can't do, which then determines the same for 3rd-party applications. The interface is little more than a series of drivers, much like those on your PC, that by abstracting low-level functionality, frees the software from having to know too much about the hardware. By planting a durable stake in the ground, the interface guides hardware vendors in cases, as with Android, where Google is trying to encourage participation by more phone manufacturers. The telcos can try to have the interface include or exclude functionality, or put in a mechanism to control access, in order to maximize their control over the consumer.

More often the access control (security, if you prefer) is in the software platform itself. App develops know there exist inaccessible APIs (application program interfaces). Getting knowledge of the most interesting of those is not possible for a true outsider. Disclosure and access tends to come like the layers of an onion, where you get to peel away more and more layers as the manufacturer and telco benefit from the app developer's involvement, and can establish trust by means of enforcable legal instruments. This has long been true of Symbian, and is much the same with Windows Mobile. Even Google's Android has its secretive bits despite being more open than any of the others.

All of this control is necessary to the business interests of phone manufacturers and the telcos through which they sell their products. Like the Xbox example, strip away the box and potential revenue from captive services can vanish in a puff of smoke. Perhaps the most protected part of the hardware platform is the phone itself. App developers simply can't get the APIs that control access to the set of primitive functions that manage the phone. They may allow an app to initiate a phone call (after all, that generates revenue), but not to answer calls, tap into the speech path, or control all aspect of phone state. If apps could get those, expect to see some fierce competitive offers to compete with high-profits features like voice mail, long distance, call screening, and so on.

This is one reason why some app developers are excited about Android (including myself) since it has more open APIs for interacting with the phone and persistent services, and there is promise of more to come. For now at least, despite being open source, Android mostly locks down the phone. It is true that you could take the source, add your own phone app (that's not open source, and not strictly-speaking part of Android), and if you can somehow by nefarious means (there is no way for a non-OHA member to do so legitimately, as far as I am aware) get the specs for the needed hardware platform interfaces, and build a complete platform that would run on an Android-capable device. It turns out that is insufficient - you now have the telco to deal with if you want to use their network. You will not get your garage-built phone to connect to their network without their authorization, and inclusion of their keys in the phone. At least it would work fine on any Wi-Fi network, including VoIP with a suitable app, so it's not a total loss.

It is now time to move in the other direction to look at the radio transceiver. This may seem an odd place to talk about control since this is the segment of the phone that contains the least amount of intelligence, and any security the telco might want can be better placed elsewhere. Even so, there are a couple of points to make. First, the transceiver in almost every case can do voice or data, but never both at the same time. If you are browsing the web and a call comes in, the voice communication takes control of the radio and your browsing is temporarily suspended. Some phones and platforms go further than this to prevent any app other than the phone app from running during a call, but that is a platform issue (protected APIs), and not due to the radio. There are some good, practical reasons for this, not least of which is personal safety (do you want a misbehaving app preventing use of the phone in an emergency?). There are also technology constraints in the radio hardware and the network radio protocol to be considered. When this changes, as it likely will, there will remain reasons to continue with the present restriction.

Consider a trivial service like Calling Name, where the Caller Id is used to pull a name out of a database. If the phone did both voice and data, an app could use the Caller Id (commonly available via an API) to launch a query over the internet. Like other services, this one is quite profitable to the telco (even if not yet universally available for unrelated reasons) and they do not want competition. They provide the name by doing the query from within the network, and then deliver it along with the call. It is still possible to get around this, at least on Android. There exists an Android app that does the Caller Id look-up, but only if you have Wi-Fi access. It uses that path rather than the cellular radio transceiver to access the internet. That's one reason I like Android!

Now we come to the last segment in my list: the network. I am going to address the data network since the voice network doesn't do much more than what we've already seen since, apart from the fancy radio technology, the network behind the radio towers is merely a legacy circuit-switched telephone network. The consequent limitation of features on the voice side is relevant since data enables so much more. Therefore the telco wants to controls how you use the data connection, and their revenue.

They use application and volume filters like many broadband ISPs, since they are an ISP. There are some differences that are particular to wireless carriers. First, they vehemently oppose VoIP. Although they have the ability to prevent many VoIP apps through their influence on the manufacturers' and platform vendors' app stores, it is still possible for some to get through the screening process or to circumvent the stores entirely by those who jailbreak their phones. For this reason it is no surprise to learn that the telcos use some fairly aggressive DPI (deep packet inspection) on wireless data.

The second is that, unlike your home broadband service, the network provides the firewall functionality. This is done for your protection, which is a good thing, but also to control the range of applications you can use. This is a more subtle point that is less obvious in its negative consequences, but is nonetheless important. It's big enough as a subject area that I will cover it in a separate article in this series.

This is already a very long article so I'm not going to cover more technical detail; I've covered enough of it for my present purpose. I will finish with what I believe this all means in regard to telco control of the smart phone.

Because of their sophistication, raw capability, and standard computing core, the smart phone is a big risk to the telco's business. They know this and are doing what they can to build in control points before outsiders start their counter-offensive. They are most concerned with the software platform vendors, not the consumers and app developers. At least not directly. This is why it was so newsworthy when Apple brought out the iPhone and their iTunes app store, and were able to dictate much of the terms to AT&T and then to other telcos. The telcos can't stop smart phones, nor do they want to, provided they can claim as large a piece of the action as they can. Each telco by themselves, big as they are, cannot control the development, manufacturing and distribution of the smart phone since the brand (Apple, Google, RIM, and perhaps Nokia) and the eco-system of apps they create are a more powerful force in the market.

The smart phone platform vendors still need the telcos so this is far from being a one-sided struggle: the telcos can still dictate some terms. So far these include locking down the cell phone app, blocking competitive phone apps, and, to my surprise, sometimes even gating use of the Wi-Fi capability of the phone (AT&T and iPhone). As already mentioned there is also the control they exert from within the network, and which is separate from their relationship with the smart phone makers.

This struggle for control seems to me workable only in the short term. Because of the distributed intelligence in and associated with smart phones there is a whiff of the divide and conquer maxim at work. With an increasing body of phone manufacturers, app developers and consumers eager to get their internet, there are too many fronts to this battle for the telco to prevail against. There is also the spectre of increasing wireless competition: when one telco blinks and lowers the wall just a bit, the others will have to respond. Carried to the limit this will reduce the telcos to little more than wireless access providers. I think they will eventually have to climb in the pool with the rest of us instead of standing guard at a fence so low that they will be overwhelmed and therefore superfluous in their role as gate-keeper.

As with most things, this will not happen overnight and it won't travel a smooth trajectory. Along they way there are bound to be some big winners who will profit from the loss of telco control and the march of technology. Some of the likely winners are already well-known names, and may include those I've mentioned.

In my next article I will look more closely at VoIP on the wireless phone and what it promises in the telco's continuing attempts to control the phone.

Broken VC: Downward Spiral

I know it can feel a bit depressing to continually harp on the dearth of angel and venture capital, but I will take that risk to highlight what I think is an issue of importance. There is a virtuous cycle among entrepreneurs, investors and markets. That cycle is broken, and not just in Ottawa.

Entrepreneurs bring the ideas, enthusiasm and hard work. Investors provide the money to keep entrepreneurs working at turning all of that into a business. That business is then marketed to acquirers or the public market. The cycle depends on a profitable return at this final stage, since this puts the wherewithal for investors to renew the cycle even more strongly than before. At its best the cycle is an upward spiral.

This is regrettably no longer true, and it was brought home to me again this morning as I read this article in the New York Times (registration may be required). I extracted a couple of paragraphs to highlight what I believe is an important point.

During normal economic times, several years after a start-up raises angel financing, it seeks larger amounts of money from venture capitalists to grow. But as venture capitalists also cut back on investments, many angels are wary of investing in a start-up without the assurance that the company will be able to raise more money to keep growing.

The start-up cycle is more complex than my diagram shows in that there are usually multiple stages of investment, and valuation of the company. Even in Ottawa it is not hard to find people who are willing to invest small amounts of capital in a basement-level start-up, but they won't because they don't believe there will be investors coming forward for the next round. Experience shows they are quite right to be concerned.

The real impact will hit Silicon Valley two or three years down the road, said Mark Heesen, president of the National Venture Capital Association. That is when start-ups that receive angel financing today would typically turn to venture capitalists for their first round of institutional investments, known as a Series A.

“If we don’t have angels, that hurts us. Where are we going to be getting our next Series A deals if those entrepreneurs aren’t out there with the ability to move their idea forward?”

And there is your downward spiral completed. There is diminishing capital availability at every stage. It isn't just the investors getting spooked, it is also the entrepreneurs who are increasingly feeling that it just isn't worth the pain. As in the broader market there is a lack of confidence, and that perception creates the reality. Some investors, as the article points out, are still investing. I'll bet many of them are not sleeping well at night. It's difficult to feel comfortable when everyone else is abandoning ship.

Regrettably, Ottawa's tech scene is in the midst of this downward spiral. I know that I have rejigged my own thoughts towards a very low-capital intensive path to building a company. Speed is perhaps less important now in this suppressed business environment so the juice delivered by large capital infusions is less necessary. That doesn't make it easy, just necessary.

Ottawa Citizen's Web Site Not About the News

I discovered a curious thing this past week. In the hours after the announcement of the deal that would end the transit strike I happened to browse the Ottawa Citizen web site. Much to my surprise there was no mention of this news. All that was there were outdated articles about prospects for ending the strike, how awful it all was, and so on. But about the end of the strike itself? Nothing.

This was not true on other sites. The local CBC page had it as its top item. Even a Toronto newspaper, the Globe and Mail, had an article up later that same evening. (NB: I'm not linking the actual articles since they are now longer top news items, and therefore wouldn't be useful.)

Even the next day there was nothing of substance to be found on Ottawa Citizen's web site. This was a strange omission that could hardly be a simple error. The story was too significant to allow an error of that magnitude to persist for more than an hour or two. It therefore had to be intentional.

I do check their site almost daily to find items of local interest. In doing so I did notice a change a couple of weeks back. At first it seemed to be little more than a new design for their web presence, one with the usual glitches in performance and article delivery. My opinion began to change when some articles, ones that promised some depth of coverage, appeared to abruptly end after a few paragraphs, clearly before what had to be the conclusion of the article but without any indication that the posted article had been truncated. I grew suspicious.

My suspicion increased when I noticed that of this latter class of article that was also published in other papers of the same chain (Canwest), notably the National Post, were similarly cut short. There was a pattern being established.

I did not see any announcement anywhere that there had been a policy change, but then I did not bother to dig any deeper. Online access to the Citizen isn't that important to me. What interests me more is the wrong-headed thinking that seems to be going on here. The type of thinking that many newspapers around the world have toyed with to a degree.

Now, when I say that, to me, online access to the Citizen is unimportant, I do not mean that I value the printed newspaper more. Quite the opposite. I have never subscribed to the Citizen, only occasionally purchasing single copies. I am certainly not going to subscribe now because of their new tactic. In my opinion they are making the mistake of mischaracterizing their market.

Canwest apparently sees their web sites as a marketing tool for selling newspapers. They seem not to understand that if they fail to provide the news on their web sites to those of us who get our news that way (and we are a growing proportion of the population) we will not buy the newspaper, but rather we will go to other web sites that do provide the news.

Their current business plan depends on printing on paper and so, like many others in their position, they use every other venue as marketing and advertising to drive paper subscriptions.

This strategy is unsustainable. If I want to read about the transit strike now, I will go and get it now. Unlike the distant past I am no longer obliged to wait until the next day to read about it or to scan the radio dial wait for the television newscast. Now means now; if I can't get it now then it isn't news. Here is a snippet about what I said about this last July:

Closer to home there's the Ottawa Citizen. They opt for ordering by time within category (though not always), and their news feed on the right used the elapsed time before present format. Not ideal, but sufficient for a general source of local news. The CBC is an oddity. Especially for local news, apparently news doesn't happen when they're not in the office; you often have to wait until the following business day for news to appear, and even their RSS feed is severely delayed. CBC online is not a good source of timely news.

How the times have changed! With their current strategy the Ottawa Citizen (or Canwest) is loudly declaring that they are in the newspaper business, and not in the news business. That is a recipe for failure now that their competitors are better adapting to the web. For their own benefit I hope they come to their senses soon. As it is I have little reason to peruse either the Citizen's web site or the print edition.