Friday, June 26, 2015

The Economy and Real Estate

From time to time it is worth a look at how well we may be doing. The above is an interesting chart. It is the total real estate loans issued by month and the annualized growth rate by month. One can see the collapse period but for the last eighteen months we have been doing quite well. This may be one of the best signs of late, of course unless you live in San Francisco!


In the summer of 1974 while at MIT I got a group of local minority students to help on a radar problem at Logan Airport. We were to examine the issue of airport surface traffic control and my group of students were what I had to help me out. They were sharp, dedicated and hard workers. The following summer, 1975, MIT formalized a program called MITES. It is not in its 40th year.

In the late 80s and early 90s I worked again with MITES bringing a half dozen or more students down to New York to work with me at NYNEX (now Verizon). They were great! They went on to Medicine, Investment Banking and Entrepreneurial start ups.

This is an amazing program and I am happy to have played a small role along the way. I still see the former students and from time to time get together. I have seen families grow and careers expand. Of all the programs at MIT this is clearly one of the most productive.

So Happy 40th to MITES!

Internet and Human Rights

I just read a piece which discussed the Internet as being a human right. Rousseau would even be surprised. Human rights do change with time, for example we do have "free" telephone service to those who cannot afford it. But Internet access is a bit more complex. It is available at your local library, if you have one, and at all Starbucks I would guess. Most hotel lobbies have it as well. But you have to possess a device which can access the Internet. Is that part of the right.

In ArsTechnica they state:

FCC Chairman Tom Wheeler said in a speech today that "broadband should be available to everyone everywhere." Wheeler: If slow speeds are enough, why do you heavily promote faster service? The FCC was created in 1934 with the mandate to ensure universal access to telephone service at reasonable prices. Today there is a "Universal Service Fund" to subsidize access to Internet and other communications services but no strict requirement that everyone in the US be offered broadband. Availability varies widely throughout the country, with many rural customers lacking fast, reliable Internet service.

I wrote extensively on Universal Service some twenty years ago, as the FCC was considering expanding it to wireless. 

A United Nations report in 2011 said disconnecting people from the Internet is a human rights violation. Vint Cerf, who co-created the networking technology that made the Internet possible, wrote that Internet access is not a human right, arguing that "technology is an enabler of rights, not a right itself... at one time if you didn’t have a horse it was hard to make a living. But the important right in that case was the right to make a living, not the right to a horse. Today, if I were granted a right to have a horse, I’m not sure where I would put it."

Universal Service was focused on a survival issue, the poor and elderly needing access to emergency care. Internet access is dramatically different. It is Facebook and Twitter, the benefit to humanity being marginal at best.

Thus one should ask why we should pay for this service, what is the societal benefit? My position of some twenty years ago seems to remain the same.

China and the US

There are two contrasting media outlets which discuss their country's interests. China Daily is for China and RT for Russia. RT seems always to find the most extreme example of US actions and always finds a way to condemn the US. China Daily on the other hand is a window to China and is somewhat even handed.

A recent piece by China Daily is worthy of reading. It describes actions by the US with China during WW II. The article states:

Top-secret military documents from World War II have revealed the depth and strength of the alliance between China and the United States against Imperial Japan, as well as joint efforts to rescue downed US pilots. The cache of intelligence documents, detailing a number of daring missions, is on display at Jianchuan Museum in Anren, Sichuan province. More than 1,100 documents and other artifacts were donated by the family of Major Richard Hill (1908-92), a US military intelligence officer who coordinated the rescue of 46 US pilots shot down over occupied China. Fan Jianchuan, who owns the museum, said he is passionate about bringing the largely forgotten story of US-China collaboration to life for a new generation, and that the path to future peace and friendship lies in these wartime ties. 

The fact was that the US and China did cooperate greatly during WW II and this was an added dimension that we all too often forget. 

On the other hand we should always re-read Mahan as well as Bywater to best understand the Pacific as a region of potential military conflict. China is unlike Japan, it is economically self sufficient and has access to resources that it deems necessary. However control of the seas is as critical to China as it was to Japan.

Wednesday, June 24, 2015

Squirrel Summer

Just hanging out! Summer is here and so the guys are resting!

Broadband and Politics

In a recent article in Backchannel an attorney whose opinions in my opinion lack any insight into fundamental technical and operational factors opines on broadband in NH. Some ten years ago I spent a few years trying to do broadband in over 20 towns in New Hampshire. I have a home in New Hampshire and I got to know every street in these towns. All one has to do is examine some cases we presented on our web site. We did years of work examining every street and every market. More than likely we got to know the state better than most Presidential candidates. From Nashua to Colebrook.

Now the author states:

Why? Because New Hampshire, our nation’s 42nd most populous state, has lousy connectivity. The FCC defines high-speed Internet access to be 25 Mbps down/3 Mbps up these days, and more than a third of the rural population in New Hampshire (most of which votes Republican, by the way) can’t buy that kind of connection at any price. Fewer than one out of every six urban New Hampshire residents can buy that connection even if they want it: the wire just doesn’t exist in their town.

Why the poor connectivity. All you have to do is look at the paper I wrote after the attempt to build out fiber. I stated: 

This paper presents one of the most significant costs of implementing a broadband service but at the same time one of the least analyzed component in that process, franchising. Simply stated, for a town as small as a few thousand households, the time it takes to obtain a franchise under the best of circumstances is often well in excess of one year and the amount of labor includes often two or more people dedicated to that effort plus other costs such as legal, engineering and other costs. If the incumbent decides to fight, the process may take longer. The municipalities always want to increase their returns so the process becomes an escalation of demands and delays. For towns of say 2,000 households, as the author demonstrates by specific ca se studies, costs of $400,000 to $500,000 are not unrealistic. This means readily an additional cost of $250 per HH or at 25% penetration, $1,000 per HH. In contrast the capital required to deliver broadband in such a community is $1,500 per HH. Thus the franchise costs are approaching the capital costs per HH in many communities. This clearly becomes a dramatic if hidden element but also becomes a real but avoidable barrier to entry for any and all new broadband entrants. This paper details these costs and others and makes suggestions to remedy them.

 Namely, the towns themselves, in my experience and my opinion, were one of the greatest road blocks. Add to that was the influence the cable companies had in trying to stop any fiber build.

Overall the piece fails in my opinion to understand the complexity of New Hampshire politics. The towns may want fiber but the way they go about it is the most significant obstacle. It would really help to understand the record and not make statements which serve a political agenda.

Unfortunately I have the distinct disadvantage of experience. Politics does not.