News Center

The Demise of Google Fiber Shows There Are No Easy Answers in Telecom

By Mike Montgomery

When Google rolled out its fiber business in 2012, it was an appealingly easy solution for a difficult situation. Like a fairy godmother solving all of our problems with a sweep of her wand, Google was going to bring blazing fast 1 gigabit speed to homes across the country and, for as little as $70 per month, people were going to get access to Autobahn speeds previously only dreamed of on our American Superhighway.

With its fat wallet of cash, Google seemed well-positioned to do the expensive work of buying failed municipal broadband networks as well as building some of their own new networks, tearing up roads and sidewalks and laying its fiber in select neighborhoods. Kansas City, where Google piloted the fiber program, suddenly seemed poised to become the next internet startup hotspot.

But now it turns out the task was too much even for Google. The Wall Street Journal is reporting that Google’s parent company, Alphabet, is “rethinking” its fiber rollout plans in the face of mounting costs.  Confronted with the reality of today’s regulatory environment, the company appears to now be leapfrogging the morass entirely, jumping ahead to advanced wireless technologies – which could deliver speeds up to 10 gigabits per second – viewed by many as the broadband “game changer” for connectivity and speed.

Google Fiber is a well-intentioned idea. We need more people to have better internet access so they can get the most out of the growing digital economy. Work is increasingly being done over the internet as companies move to cloud technology. Even applying for a job now usually requires internet access. Watching TV, shopping, and connecting with loved ones are all things increasingly being done online. Those who don’t have access or are operating from networks in need of modernization are at a severe disadvantage in today’s digital world.

But as Google is discovering, laying new miles of fiber is far from easy.

Read the full article here.

How Tech Entrepreneurs, Big And Small, Are Helping Solve The Problem Of Organ Donation

By Mike Montgomery

Transplanting organs is a medical miracle. Finding willing donors, and connecting them to the patients who need organs, can sometimes be an even bigger miracle. Only 52% of Americans are registered as organ donors, according to nonprofit registry Donate Life America.

In early July, Apple AAPL -0.37% took a step toward getting more people enrolled when it announced that iPhone users will be able to register as an organ, eye or tissue donor using iOS 10’s integrated Health app. In conjunction with Donate Life America, Apple will share this information with the national registry.

This isn’t the first time Apple has allowed users to list themselves as organ donors; the iOS 8 release in 2014 featured a way for donors to list their status, as they do on driver’s licenses. What’s new is the ability to register and the routing of that information into the donor database, where doctors can see it. With 100 million iPhone users worldwide, that could make a big difference in clearing organ-donation waitlists.

“Apple’s uniquely positioned here,” because of the iPhone’s massive user base, says Iltifat Husain, assistant professor of emergency medicine and director of mobile app curriculum at Wake Forest Baptist Medical Center in Winston-Salem, N.C.

Dr. Husain, who runs the site, says he’s surprised Google GOOGL +0.36% hasn’t offered the same functionality to Android users. From a public health perspective, he says, it makes the most sense for the largest mobile platforms to collect information about organ donors’ wishes within the operating system they already use, without having to download a third-party app.

Read the full article here.

Startups Venturing Into Highly Regulated Industries Can Learn From Fintech’s Playbook

By Mike Montgomery

The world’s 10 largest banks control nearly $25 trillion in assets — almost as much as the annual GDP of the U.S. and China combined. But their size doesn’t mean they are invincible. Politicians have called for breaking up Wall Street banks. Business credit is tightening. The financial industry seems ripe for disruption.

For the past few years, tech upstarts from Silicon Valley and New York have been doing their best to do just that. Online lenders such as OnDeck Capital, LendingClub and Prosper have been stealing momentum from the big banks by promising to make borrowing easier for small businesses and individuals. OnDeck and LendingClub even went public.

Yet some of the high-profile financial technology, or fintech, startups have stumbled recently. LendingClub, a peer-to-peer lender that has funded more than $20 billion in loans, is under investigation by the U.S. Justice Department for disclosure failures. Its CEO and finance chief both resigned. Prosper cut back on marketing to new borrowers and laid off 28% of its employees.

“At a certain point, these smaller companies start to run up against the same issues that the larger financial institutions have,” says Maria Gotsch, president and CEO at the Partnership Fund for New York City, a corporate-funded, nonprofit group with a mission to create jobs in New York.

Even with the aid of new technology, predicting customer defaults and complying with regulations is extremely challenging. So the upstarts have started working more closely with the old-line banks. Prosper is reportedly in talks with investment firms to sell them $5 billion in loans, possibly in exchange for equity warrants. J.P. Morgan Chase signed a deal with OnDeck to help make loans for small-business customers.

Read the full article here.

In Tech-Driven Economy, FCC Needs to Step Up

By: Mike Montgomery

It’s clear that technology is a key driver of prosperity in today’s modernizing economy. Trillions of dollars in economic activity flow through the networks which make up the internet, making America’s digital economy the envy of the world. Networks are redefining the services people consume and the income people derive. For example, according to a Pew survey, 72 percent of Americans have used a sharing or on-demand service.

That’s why the Federal Communications Commission has never been more important. From last year’s Net Neutrality rules to current proceedings about set-top boxes, internet privacy and business services, FCC rules are shaping the future of the internet – and the broader economy that it fuels. Whether you agree or disagree with these regulations, everyone agrees they will have a profound impact.

That is why it’s so disconcerting to see the FCC disconnected from the economic impact of its decisions. In a report he published in July, the FCC’s very own former chief economist, Gerald Faulhaber, Ph.D., raised alarms about the agency’s dangerous turn away from economic analysis in its decision making.

In the report, Dr. Faulhaber asks: Why do the U.S. Department of Labor, the U.S. Environmental Protection Agency and the Consumer Financial Protection Bureau all conduct stringent cost-benefit analyses on their decisions while the FCC does not?

The FCC has simply become too important to the economy for it to fail to explore the economic impact of its decisions. For example, numerous economists warned the FCC that its decision to impose so-called Title II regulations on internet service providers, which treats today’s advanced broadband access in the same way as telephone services from generations ago, will have a negative impact on investment and innovation while not solving the issue we all want addressed: how to ensure that internet traffic is treated fairly across networks, regardless of where it comes from. Yet, when issuing its Open Internet Order, the FCC conducted no economic analysis of the impact its proposed rules would have on consumers, innovation or investment.

How is that possible?

The problems continue. The FCC is currently facing a major backlash from Congress, Hollywood and many innovators for its proposed new technology standards for set-top boxes.

Read the full article here.

ZEV program running out of gas?

By: Kish Rajan

With the clock ticking down to the end of this year’s legislative session, our leaders in Sacramento are debating initiatives that will put more clean cars on the road, boost air quality and innovation, and improve the health of our residents. We must take advantage of this brief window of opportunity to recalibrate the state’s primary mechanism for encouraging electric vehicle adoption – the Zero Emission Vehicle (ZEV) credit system.

California – led by Gov. Jerry Brown and the state air resources board — leads the world in the transition to zero tailpipe emissions, powered by ingenuity not only in the technological realm, but in the policy arena as well. The goal was to bolster the efforts of automotive entrepreneurs to accelerate the deployment of clean cars up and down the state, in an industry notoriously immune to change.

The ZEV credit program as it’s currently structured won’t get us to where we need to be – currently, fewer than four percent of cars sold each model year are electric.

To ignite and accelerate this shift, state policymakers introduced so-called “ZEV credits”, a program to incentivize car companies to devote significant resources toward developing and deploying electric vehicle models that excite drivers.  This is the carrot for the automotive industry to move forward. The intent was to inject vehicles with zero tailpipe emissions into the marketplace; it was smart, creative regulation to bolster innovation and creativity that should be a national model.

These credits were designed to work with companies small and large, legacy and upstart, in order to push the clean car market forward.

Yet, despite the best intentions of state regulators, the ZEV credit program as it’s currently structured won’t get us to where we need to be – currently, fewer than 4 percent of cars sold each model year are electric.

Read the full article here.

Advertising sucks, but TV would be worse without it

By: Mike Montgomery

Given the opportunity, many of us choose to organize our TV watching to minimize ads as much as possible. We record, fast forward or pay subscription fees to services like Netflix and HBO to watch shows ad-free. But here’s the dirty little secret of television — advertising makes it go and keeps it affordable for the viewing public.

Which is why the Federal Communication Commission’s attempt to “open” the cable set-top box to competitors has the potential to be a giant disaster for consumers. Let me explain. Although advertising is becoming increasingly easy to skip, it still funds an enormous number of programs. Last year advertisers spent $79 billion on TV. That’s down slightly from 2014 but still makes it the largest slice of advertising spending in media beating out digital and (obviously) print.

Advertising makes up as much as 50 percent of revenue for programmers and 8.5 percent of revenues for the so-called multi-channel video programming distributors. The money flowing from these ads keeps the TV ecosystem going. Networks have money to invest in and pay the creators who make TV shows. Prestige shows like “Mad Men” and “Empire” are financed by ads. But it also allows MVPDs to keep subscription prices relatively low by providing another source of revenue — one that doesn’t come out of consumers’ pockets. That helps subsidize pay channels, which is why standalone HBO costs $14.99 per month but you can get HBO through your cable provider for $10 per month.

The FCC’s proposal to open the set-top box market to third-party developers would destroy this entire system. The MVPDs would be required to provide their programming streams to anyone who wanted to use them. These third-party box makers wouldn’t be required to follow the advertising deals that MVPDs have carefully contracted. They could alter or delete the original ads or pile on more ads and keep all that new revenue for themselves, driving down the value of the “original” ads and sucking up revenue that would ordinarily go to fund new programs. Chairman Tom Wheeler has claimed the new rules won’t allow this but experts recognize that the “rules won’t prohibit extra ads around TV channels.”

Read the full article here.

Entrepreneurs Need To Embrace Futurism

By: Mike Montgomery

Entrepreneurs often struggle to capture lightning in a bottle by trying to create a product today that anticipates tomorrow’s trends. But are the bulk of these entrepreneurs not looking far enough ahead?

Early this month, The New York Times ran a fascinating article that talked a little about the recently deceased futurist Alfred Toffler’s work (Future Shock) and the demise of the idea most associated with him, futurism:

In many large ways, it’s almost as if we have collectively stopped planning for the future. Instead, we all just sort of bounce along in the present, caught in the headlights of a tomorrow pushed by a few large corporations and shaped by the inescapable logic of hyper-efficiency — a future heading straight for us. It’s not just future shock; we now have future blindness.

Farhad Manjoo, who wrote the Times piece, argues that many technological changes are happening so quickly that global crises are occurring as a result. The thrust of this piece is that our governments should really take a closer look at the academic study of futurism and try to determine how to better and more smoothly integrate technology in order to prepare for the future.

On a smaller scale, entrepreneurs, whether they are specifically focused on new technologies or not, need to do the same. The key is to learn how to properly forecast the future.

“Entrepreneurs need to be thinking about the future, but that requires they invest time into forecasting trends,” says Amy Webb, the CEO and founder of Future Today Institute. “The challenge is that trends in technology have become synonymous with things that are trendy.”

Read the full article here. 

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