November 2009

A Federal Communications Commission workshop on Broadband Access and Adoption on Diversity and Civil Rights Issues revealed that we need much richer data on who does not have access to broadband and who is not adopting broadband and why. The answers we have are not sufficient to help us craft an intelligent National Broadband Plan to promote advanced telecommunications services to all Americans. We need more granular information. As FCC Consumer Research Director Dr. John Horrigan stated, several studies suggest that "broadband adoption in the United States stands at close to two-thirds of Americans." But these studies are problematic on a number of fronts. The first problem is that the studies assume that we already have a clear definition of broadband, when, as Santa Clara Law Professor Catherine Sandoval noted, not even the FCC has been reliable about the definition of broadband. The definition of broadband is made even more complicated by the suggestion that some groups are adopting wireless broadband, when we do not have sufficient information about which applications are available to this rising group of wireless broadband users. Dr. Horrigan also noted that "education and income are the two strongest predictors of whether you have broadband at home." But education and income are not the only predictors. Region, ethnicity, and other factors are also important. As Rutgers Dean Jorge Schement said, "it's not just about money; there's something else going on that prevents people in the same income group from having the same levels of access to information technology. Technology access is also dependent on aspects of ethnicity."

National Cable & Telecommunications Association President Kyle McSlarrow says that digital media literacy should be a focus of broadband stimulus funding -- to the tune of $500 million. "Congress should direct that the agencies managing distribution of broadband stimulus funding allocate $500 million during the next two years for the development of digital media education tools," McSlarrow said in a speech to the 2009 Annual Conference of the Family Online Safety Institute. "With a substantial portion of stimulus funding yet to be allocated, and with the broadband adoption rate continuing to increase from coast to coast, we must vigorously renew this call to acknowledge as a national priority digital literacy for children and families."

New York Attorney General Andrew Cuomo, has filed an antitrust lawsuit against the computer chip manufacturing giant Intel, accusing the company of engaging in a "systematic worldwide campaign of illegal, exclusionary conduct to maintain its monopoly power," in the market for computer chips starting in 2001. The complaint alleges that Intel paid hundreds of millions and in some cases billions of dollars in rebates to PC manufacturers in an attempt to limit their use of chips from rival Advanced Micro Devices. When PC companies appeared to be getting too close to AMD, Intel would, the complaint says, threaten them with retribution by withholding payments they were receiving from Intel. These payments, which Intel called "rebates," amounted to what Cuomo called "payoffs with no legitimate business purpose that Intel invented to disguise their anticompetitive nature." The complaint paints a picture of PC makers struggling to maintain their slim profit margins, fearing that Intel's payments might dry up if they used AMD chips in their computers. The complaint accuses Intel of threatening PC makers with retaliation if they did business with AMD. During the period from 2001 to 2006, the complaint alleges, Dell sold no computers with AMD chips in exchange for billions in payments from Intel. Intel used what the complaint describes as a "favorite code word" in its dealings with PC companies: That word was "alignment." If a PC company was not "aligned" then they could not expect favorable treatment from Intel, the complaint says, including the payment of rebates, pricing concessions, priority in obtaining needed parts during shortages, and marketing funds. A key part of Intel's strategy for years has been to help PC companies market their products. Under the "Intel Inside" programs, PC makers you touted their use of an Intel processor or a combination of Intel technologies in their machines, would have their advertising costs partially subsidized by Intel. This arrangement has been described by a PC company executive cited in AMD's lawsuit as "the cocaine of the industry," meaning that PC companies relied heavily upon these payments in their business plans.

Auletta shares ten lessons drawn from his extensive access to Google's inner workings. 1) Passion wins. 2) Focus is required. 3) Vision is required. 4) Team culture is vital. 5) Treat engineers as kings. 6) Treat customers like a king. 7) Every company is a frenemy -- no permanent allies, only permanent interests. 8) no permanent allies, only permanent interests. 9) There are no certitudes. 10) Eric Schmidt: "Life is long in the sense that we have long memories. Time is short in that you have to move very quickly. But to me the most important thing to know is that life has a way of working things out. We forget so quickly what the problem was three or four years ago. So my personal view of life is that every problem is an opportunity." This is a reason to think and act boldly, as Google has, to take risks, and not to be anchored down by "long memories."