McLuhan and Facebook

There is an arrogance of youth that from time to time seems to get out of hand. We all have suffered from it and we will most likely will. Sometimes that arrogance is well placed, such as movements against discrimination or wars which make no sense. At other times the arrogance is less well placed. One of my favorite gripes regards the peer grading systems which are less peer grading than exposes of that very youthful arrogance gone wild. In many of the younger generation there was a feeling that any opinion, especially that of the youth, is as valid as any others. If one feels they are right then that is all that is necessary. Then they apply that in a manner which drives facts and any semblance of truth into early graves.

Now arises a terrifying experiments. As the Guardian reports:

But now Facebook, the world's biggest social networking site, is facing a storm of protest after it revealed it had discovered how to make users feel happier or sadder with a few computer key strokes.
It has published details of a vast experiment in which it manipulated information posted on 689,000 users' home pages and found it could make people feel more positive or negative through a process of "emotional contagion". In a study with academics from Cornell and the University of California, Facebook filtered users' news feeds – the flow of comments, videos, pictures and web links posted by other people in their social network. One test reduced users' exposure to their friends' "positive emotional content", resulting in fewer positive posts of their own. Another test reduced exposure to "negative emotional content" and the opposite happened. The study concluded: "Emotions expressed by friends, via online social networks, influence our own moods, constituting, to our knowledge, the first experimental evidence for massive-scale emotional contagion via social networks."

That is the researchers managed to manage what people saw and tuned it based on their known profiles. As is often the case I am reminded of the McLuhan quote from Drucker:

"Did I hear you right," asked one of the professors in the audience, "that you think that printing influenced the courses that the university taught and the role of university all together." "No sir," said McLuhan, "it did not influence; printing determined both, indeed printing determined what henceforth was going to be considered knowledge."

That is the medium, in this case a manipulated Facebook, becomes "knowledge" and "truth".  Namely we see that any "social media" site can become a truth bender site. One does not have to go somewhere, one gets the distorted truth created for you by the benevolent entity who you somehow believe is altruistic. In fact they are "truth benders".

The Guardian goes on further:

Researchers have roundly condemned Facebook's experiment in which it manipulated nearly 700,000 users' news feeds to see whether it would affect their emotions, saying it breaches ethical guidelines for "informed consent". James Grimmelmann, professor of law at the University of Maryland, points in an extensive blog post that "Facebook didn't give users informed consent" to allow them to decide whether to take part in the study, under US human subjects research. "The study harmed participants," because it changed their mood, Grimmelmann comments, adding "This is bad, even for Facebook." ...But the study has come in for severe criticism because unlike the advertising that Facebook shows - which arguably aims to alter peoples' behaviour by making them buy products or services from those advertisers - the changes to the news feeds were made without users' knowledge or explicit consent.

Namely experiments like this in the social sciences need informed consent. In this case they just manipulate half a million people.  One can just imaging the long term consequences. How this for a "peer review". The interesting arrogance of youth is that these folks even published their efforts. They were accompanied by academics who frankly should have known better, but one guesses did not.

A History Lesson: 100 Years Ago

It was 100 years ago today that the Archduke Ferdinand was assassinated and WW I began. It was the overall lack of world leadership and an amalgam of loose terrorists that led a bumbling set of Heads of State to aim the guns and pull the triggers. Perhaps a bit of stepping back and thinking wisely and dealing with problems would be useful.

For this summer does not bode well either.

Free to Choose: Just What?

HHS announced that it will automatically re-enroll those who signed onto their ACA plans via they FED's web site again in 2015 no matter what they decide or what their employment state may be.

They state:

Today, the U.S. Department of Health and Human Services (HHS) expects to announce its plans for helping existing Marketplace consumers get auto-enrolled for next year.  These plans would give existing consumers a simple way to remain in the same plan next year unless they want to shop for another plan and choose to make changes. “As we plan for open enrollment in year two and continue to build a sustainable long-term system, we are committed to simplifying the experience for consumers by allowing auto-enrollment,” said Sylvia Mathews Burwell, Secretary of HHS. “We are working to streamline the process for consumers wishing to remain in their current plan.”

In today’s health insurance market, the vast majority of consumers are generally auto-enrolled in their plan year after year.  For example, about 88 percent of employees receiving coverage through the Federal Employee Health Benefits Program don’t choose to change plans and are instead auto-enrolled in their current plan with updated premiums and benefits.  These guidelines aim to bring the Marketplace in line with this practice in the existing insurance market. As with existing open enrollment periods for employer-based coverage, consumers are strongly encouraged to use the open enrollment period as an opportunity to update their information and reevaluate their health coverage needs for the coming year.

Consumers always have the ability to return to the system for shopping, changing plans, or reporting life changes, or a change to their annual income to ensure they are getting the lowest cost possible on their monthly premium. And, to help ensure the program integrity of how taxpayer dollars are spent, while also protecting consumers from having to pay back tax credits they are no longer eligible for, under the approach that the Federally-facilitated Marketplace would use in 2015, the small number of consumers whose updated income information suggests they no longer qualify for a tax credit next year, will still be auto-enrolled in their current plan, but without a tax credit. State-based Marketplaces may take this approach as well, or propose an alternative.

Under the plans that HHS expects to announce today, consumers in the Federally-facilitated Marketplace will receive notices from the Marketplace informing them how to update their information to get a tailored and updated tax credit that keeps up with any income changes. Consumers will receive information from their health insurance company about the premium and the amount they are eligible to save on their monthly bill close to the beginning of the open enrollment period, when they will be able to take action should they choose to do so.

So much for freedom of choice. Next they put the VA after you!

Recession Stats: June 2014

The economy is doing quite poorly. Recovery is still a way in the distance. We examine the St Louis Fed's stats again as we have done since the beginning.

Let us begin with some basics:

Industrial Production is not bad. That is not the problem.

Income is dropping. That is a serious problem that few have addressed.

 

Ironically Retail Sales is keeping steady.

Employment is stagnant. It is hugging the bottom and there is no end in sight. The government is doing all to keep it that way.

GDP on the other hand is in the tank and getting worse. Why? Let us examine the components.

Personal Consumption is increasing but slowly. Note the statement that the cold weather dampened the GDP is out right wrong. It should appear above BUT it does NOT!

Investment dropped. Why? Good question.

Government spending is down and this is a factor!

Also Exports dropped adding t the drop in GDP

Imports remain flat.

Thus we have a drop in Government Spending and in Investment.

Another Bad Idea

There is a move afoot to have the Federal Government take more control of our Universities. Recently one Senator from Illinois bemoaned a case of some student who attended a Community College and then went to some for profit school to study Design. Somehow in the remaining two years she amassed some $130,000 in loan debt and then could not find a job. Frankly she could have known aforehand that jibs in that field were few and far between. Furthermore she should have understood that $130,000 in loans and in that field were incompatible. So what does the Senator do? Blames the school. His solution, Federal Government controls.

What duty does the student have to make realistic decisions? The student made a bad choice, now she must live with it. Perhaps the loan should be predicated on what the student majors in. English and Fine Arts majors should not be eligible, along with History and Philosophy majors. Engineering perhaps should get the most. I will leave Finance majors for a later discussion.

Now the NY Times chimes in as follows:

The study says the federal government should set minimum performance standards for all colleges receiving federal aid: at least 17 percent enrollment of poor and working-class students; a six-year graduation rate of 15 percent; and three-year student loan default rate of no more than 28 percent. Colleges that do not meet these standards could face escalating sanctions — including the loss of federal grants and charitable interest deductions for donors. Dropout factories and diploma mills that fail to improve would face the ultimate penalty: loss of eligibility for federal aid, which would have the effect of shutting them down. The performance standards would be updated periodically as a way of steadily raising the quality of schools rated at the very bottom. The report outlines useful steps Congress can pursue should it bestir itself to listen to the president and allocate federal aid along the lines he has suggested.

This report is from Education Trust, a lobby group in DC. They published a report which they allege details the need for Government control. Their agenda appears to seek more Government control over higher education. Unfortunately as we see with the Public School system it almost always results in increased incompetence and politically correct control. One need look no further than the recent attempts in New York City to eliminate the elite schools such as High School of Science, which sent thousands of brilliant students to build our country. Now they want such high performance schools eliminated.

Imagine MIT or Harvard being controlled by some GS 10 whose former job was a VA scheduler now being responsible for over sight on MIT admissions. That could be our future.

Recognition of Technical Innovation

In a recent piece in Project Syndicate, Sachs remarks:

...“decarbonizing” the energy system is technologically complicated. America’s real problem is not competition from China; it’s the complexity of shifting a $17.5 trillion economy from fossil fuels to low-carbon alternatives. China’s problem is not the US, but how to wean the world’s largest, or second largest economy (depending on which data are used) off its deeply entrenched dependence on coal. These are mainly engineering problems, not negotiating problems.

 

 Sachs then goes on to details some of the technological solution approaches. Yes, this is a technology problem, and technology can solve it. It is not clear that a Manhattan or Space Project is the approach. But the thread is correct. This is starkly different from the classic all political tax approach presented by the former Government official we discussed recently.

Very Cute!

I just ran across Open Garden and their offerings. Simply what they appear to do is as follows:

1. Each mobile device has three wireless access modes; a carrier, a wifi, and a bluetooth.

2. The carrier interface is one to one with the carriers base station. The carrier then connects to the Internet backbone.

3. However the wifi and bluetooth can connect to any other wifi or blutooth. Thus unlike the carrier mode one can create ad hoc mesh networks of combined wifi or bluetooth. These are off the Net networks, they are ad hoc and come and go as users come and go.

4. The range of bluetooth is short but wifi may be hundreds of meters. Thus if we have a town of say 10,000 users and 10 sq km, then we have more than adequate density if everyone has the software on their mobile devices.

5. If a critical number load the software and keep devices on then one has a local mesh network that is NOT an Internet connection. It is a Meraki network without a carrier.

This is being used in Iraq by many who want to avoid being intercepted. The BBC reports:

About 40,000 users downloaded Firechat last week, compared with 6,600 over the previous few months, the company says. The internet has been blocked in some Iraqi provinces, as authorities seek to prevent militants from communicating. Access to social media sites has also been severely restricted. Firechat allows users to take part in group chats with between two and 10,000 people, without the need for an internet connection. Using a technology known as "mesh networking", messages can be sent to people within the immediate vicinity, as long as they too have the app installed. However, discussions are not private, and can be seen by anyone in the area. The software is available for both Android and iOS devices, and has a range of roughly 70m (230ft). However, if enough people use the app, messages can travel over far greater distances, hopping between intermediary devices in a chain-like effect.

This is an interesting turn and potentially has substantial disintermediation applications! The applications is worth following.

The Carbon Tax

The people who brought us the most recent depression are suggesting another, the carbon tax. In the NY Times a former Government official makes the following statements:

 I’m a businessman, not a climatologist. But I’ve spent a considerable amount of time with climate scientists and economists who have devoted their careers to this issue. There is virtually no debate among them that the planet is warming and that the burning of fossil fuels is largely responsible....

Now I have not argued that we are warming. I have been tracking this with sentinel species for over 25 years. There is warming and it is significant. However it is not clear what the results will be. Namely I can see earlier blooms and I can see movement of plant species northward. Will the sea water really rise that high, well they managed in Holland, and after all New York was called New Amsterdam, and in fact the bottom half of Manhattan was underwater when my ancestors arrived in 1649. Thus the issue is not the fact of global warming but our ability to deal with the consequences.

He continues:
  
Some members of my political party worry that pricing carbon is a “big government” intervention. In fact, it will reduce the role of government, which, on our present course, increasingly will be called on to help communities and regions affected by climate-related disasters like floods, drought-related crop failures and extreme weather like tornadoes, hurricanes and other violent storms. We’ll all be paying those costs. Not once, but many times over....

Unless I missed something a tax takes money from the people and gives it to the Government. Thus this tax he proposes takes money from those who could least afford to miss it and gives it to over paid useless Government employees to allocate as they wish. One suspects that the writer has not taken the New York subway with the masses for decades, and most likely his limo gets well less than 30 mpg. Also he could worry less about a carbon tax. The poor schlub in Queens sees the result as a regressive tax on him.

A tax on carbon emissions will unleash a wave of innovation to develop technologies, lower the costs of clean energy and create jobs as we and other nations develop new energy products and infrastructure. This would strengthen national security by reducing the world’s dependence on governments like Russia and Iran.

This is one of the most illogical statements ever made. By taxing the masses then the Government decides on winners and losers regarding low carbon sources. Did we not just see that for the past six years. Was that a success? Entrepreneurs work despite the Government. They work in a Darwinian world, cruel and survival of the fittest reigns. The suggestion of this former banker and Government employee fails on all counts; realism, rationality, and reason. Pity.

Peer Review, MOOCs and Total Chaos

I am not a fan of peer review in MOOCs since it makes no sense. There are no peers as would say be the case in submitting to Science or Nature. It is assumed the Editor in each case selects a true peer who has their own track record. Yet in a MOOC setting one gets a total and random collections of people who have generally no experience or knowledge of any depth in the subject. In addition, the cultural difference results in chaos.

But the real issue is what the so called peers see as Plagiarism. Here they walk a very fine line. It appears that the "peers" can assign a paper as plagiarized with no basis for saying so. There is no due process, there is no meeting your accuser. But there is a basis for defamation. Why the companies who allow this have not considered the legal consequences I cannot fathom. You have students from cultures where it is fine to defame others for their own achievements and practicing that randomly online and assuming there will be no consequences. That is unrealistic.

Plagiarism is a bit difficult to prove, unless one finds the source and then demonstrates the exact extraction without referring to the source. We try somewhat diligently herein to be certain at all times to delineate fair use of segments with a reference and where we seek comments. That generally is acceptable. On the other hand accusing someone of plagiarism without basis is de facto defamation.

Why MOOCs allow this practice is beyond me. It may come back to haunt them.In fact it is my opinion that it facilitates a potentially antisocial trend in a class of individuals and the result may be catastrophic.

MOOCs have a long way to go before they work. A small few, again I use Lander's course as the sine qua non example, but there have been frankly none since then. The potential is there but the anonymous discussions create cadres of the strangest types. They may be well worth a study.

What is Economics?

The question of the definition and scope of economics has been thrown back and forth for centuries. Clearly Economics is not a science as is Physics or Biology. Perhaps it is akin to Biology in the late 18th century, a set of descriptives of what may be out there but lacking a base of understanding without its DNA.

Skidelsky has written brilliantly over the years on Economics and its history so when he opines it is always worth considering. Skidelsky has recently written on Post Crash Economics and he says:

For starters, economics teaching and research is deeply embedded in an institutional structure that, as with any ideological movement, rewards orthodoxy and penalizes heresy. The great classics of economics, from Smith to Ricardo to Veblen, go untaught. Research funding is allocated on the basis of publication in academic journals that espouse the neoclassical perspective. Publication in such journals is also the basis of promotion. Moreover, it has become an article of faith that any move toward a more open or “pluralist” approach to economics portends regression to “pre-scientific” modes of thought, just as the results of the European Parliament election threaten to revive a more primitive mode of politics.

He continues:

For now, the best that curriculum reform can do is to remind students that economics is not a science like physics, and that it has a much richer history than is to be found in the standard textbooks. In his book Economics of Good and Evil, the Czech economist Tomáš Sedláček shows that what we call “economics” is only a formalized fragment of a much wider range of thinking about economic life, stretching from the Sumerian epic of Gilgamesh to the meta-mathematics of today.Indeed, mainstream economics is a pitifully thin distillation of historical wisdom on the topics that it addresses. It should be applied to whatever practical problems it can solve; but its tools and assumptions should always be in creative tension with other beliefs concerning human wellbeing and flourishing. What students are taught today certainly does not deserve its imperial status in social thought.

He agrees with the lack of scientific clarity. The mathematics all too often just creates shadows to hide behind. The discussion is best focused on what we want our society to hold and what to reject. Clearly the markets are not efficient, they hide information rather than display it. Manipulation is rampant in many ways, often small but profitable ways. Yet the issue is what do we want as a nation, as a people. Skidelsky presents an interesting opening.

US Lowest in Health Care and UK at the Top? Slanted Questions and Measures?

There is always some group trying to measure the US Health Care system to other countries, frequently for purely political purposes. A recent report by the Commonwealth Fund in my opinion is a recent thrust in that direction. It examines in its own world of metrics the US system to others and as one would expect it results in the US being last.

We have from the Guardian[1]:

The NHS has been declared the world's best healthcare system by an international panel of experts who rated its care superior to countries which spend far more on health.

The same study also castigated healthcare provision in the US as the worst globally. Despite putting the most money into health, America denies care to many patients in need because they do not have health insurance and is also the poorest at saving the lives of people who fall ill, it found.

The report has been produced by the Commonwealth Fund, a Washington-based foundation which is respected around the world for its analysis of the performance of different countries' health systems. It examined an array of evidence about performance in 11 countries, including detailed data from patients, doctors and the World Health Organisation.

"The United Kingdom ranks first overall, scoring highest on quality, access and efficiency," the fund's researchers conclude in their 30-page report. Their findings amount to a huge endorsement of the health service, especially as it spends the second-lowest amount on healthcare among the 11 – just £2,008 per head, less than half the £5,017 in the US. Only New Zealand, with £1,876, spent less.

The above uses some less that substantial metric for quality and also uses the costs metric. The conclusion is that it is less than half of the US. The NHS is hardly free of criticism. In fact it has been beaten up especially over the results of its often limited cancer care efforts.

Subsequently from the Guardian[2]:

A slow hand clap for Andy McGovern, a London hospital nurse who has proposed that the Royal College of Nursing supports a £10 charge to visit a GP. On its own terms, the proposal is an unacceptable assault on the very foundations of the NHS: that it is free at the point of use. But the suggestion is so menacing because of where it originates from. The many enemies of the NHS – who have to be diplomatic, knowing that the NHS "is the closest the English have to a religion", as Nigel Lawson once put it – will rejoice. "Aha!" they will think. "Now even the nurses are debating NHS charges, we have been given the political cover we need!"

That the NHS has just been declared the world's best healthcare system by the Washington-based Commonwealth Fund should be a matter of national pride. But the institution is in mortal danger. The free market crusaders who first took power in the late 1970s have long regarded NHS as an aberration. It is an irritating example of a service run on the basis of social need, rather than private profit – and, even worse, it is loved for it. As long as the NHS exists, it serves as a defiant reminder that there is an alternative to the neoliberal project.

Thus it appears as if there is a stirring in the NHS to enact a fee for service, albeit nominal. Yet from the Left in the UK that is opposed.

Let us briefly examine some of the measures used. From Commonwealth[3]:

Key findings related to the U.S. include:

Healthy lives: The U.S. does poorly, ranking last on infant mortality and on deaths that were potentially preventable with timely access to effective health care and second-to-last on healthy life expectancy at age 60.

What is a death preventable by timely access? Also what are the causes of infant mortality? The first is a measure based upon personal choice all too often. Take obesity. Namely in the US we have an expanding number of such cases and they are due to individual choice and not lack of care. US physicians are all too often fearful of being too emphatic with such patients and thus just over medicate. That increases the costs due to the medication, the follow on care and the sequelae.

Access to care: People in the U.S. have the hardest time affording the health care they need. The U.S. ranks last on every measure of cost-related access. More than one-third (37%) of U.S. adults reported forgoing a recommended test, treatment, or follow-up care because of cost.

This is a question of access due to cost. In the UK there is no such issue it is just getting the service in a timely manner. The cost to the patient directly is not present. Thus this question or measure begs the answer.

Health care quality: The U.S ranks in the middle. On two of four measures of quality—effective care and patient-centered care—the U.S. ranks near the top (3rd and 4th of 11 countries, respectively), but it does not perform as well providing safe or coordinated care.

Quality is elusive. We have discussed this at length. The statement that US care is not safe is somewhat without basis. The issue of coordinated care is another measure that begs the answer. Coordinated how? It was the head of Commonwealth that promulgated the Electronic Health Record system while in the Government. Was this promulgation a failure? Did the work he did fall on deaf ears despite the billions spent and mandated to be spent? Does this added costs element have no value?

Efficiency: The U.S ranks last, due to low marks on the time and dollars spent dealing with insurance administration, lack of communication among health care providers, and duplicative medical testing. Forty percent of U.S. adults who had visited an emergency room reported they could have been treated by a regular doctor, had one been available. This is more than double the rate of patients in the U.K. (16%).

How many times do they ask the same question? It is a simple technique to prove one’s answer, via a tautology. The ER statement is a symptom of the people not the system. Spend some time in an ER. See the elderly who are sent back and forth because of the incompetence of many care facilities or the intent by the facility to increase their revenue. Look at the gun-shot victims, the overdoses, the assaults. Go to Mass Gen after a basketball game and see the drunks with various assault wounds. That does not reflect efficiency, it reflects a societal norm.

Equity: The U.S. ranks last. About four of 10 (39%) adults with below-average incomes in the U.S. reported a medical problem but did not visit a doctor in the past year because of costs, compared with less than one of 10 in the U.K., Sweden, Canada, and Norway. There were also large discrepancies between the length of time U.S. adults waited for specialist, emergency, and after-hours care compared with higher-income adults.

This is a strange measure. It is a Piketty type measure, namely one where the measure is intended to provide the US with the lowest rank. Note how it is phrased, it is 39% of “below-average incomes”, namely 39% of some other smaller percent, less that say 25%. That means say 16% as a guess. Well 16% is about 1 of 7 as compared to 1 in 10 for the others. The countries mentioned have a socialized medical system and that is what the report says is best. After all it posed the questions it appears to obtain that answer.

One should examine the Board of Commonwealth[4]. It is a mix but all with what appears to be a slanted mix. In my opinion one should give little if any weight to this report.

References

http://www.commonwealthfund.org/publications/press-releases/2014/jun/us-health-system-ranks-last?omnicid=rsscmnw

http://www.theguardian.com/society/2014/jun/17/nhs-health

---

[1] http://www.theguardian.com/society/2014/jun/17/nhs-health

[2] http://www.theguardian.com/commentisfree/2014/jun/18/10-charge-to-visit-gp-nhs

[3] http://www.commonwealthfund.org/publications/press-releases/2014/jun/us-health-system-ranks-last?omnicid=rsscmnw

[4] http://www.commonwealthfund.org/about-us/board-of-directors

Global Warming and Daylilies

We have been measuring the date of first bloom, measured as days from the first of the year, for the past 25 years on Hemerocallis species. Four specific species are used; H minor, H middendorfii, H dumortieri, and H flava. The summary is below.

Spotty as it may be there is a consistent trend if we examine each species. We show all below.

Note that we have a consistent trend of shortening bloom dates by about 5-10 days per 25 years.

The question is; how dependent is this on micro conditions and how much is variability in general? The gross variability is significant. In addition given the severe winter of 13-14 we would have expected a later date but did not see it. However all trends are for earlier dates.

D Day Remembrance

The wall of the battle at Normandy Cemetery.

The landing beach looking west.

The landing beach looking east.

The pool at the cemetery.

Piketty, Basketball and Cable TV

So what does Piketty, Basketball and Cable TV have in common. Simple, wealth transfer. Why would someone pay $2B for some basketball team? If we were to believe Piketty then the return on that asset would have to exceed the return on labor, namely some people who work must be transferring to the new owner a return in excess of their labor value in the market place. Now how does that happen. Simple!

The Government facilitates it. Cable companies charge me and hundreds of millions of others for sports channels which we never watch, and even more likely never knew they had them. Just this month Cablevsion increased my basic cable rate some 4%, annualized at 8%, for another fee for one of those useless channels. If the Government enforced the Antitrust laws regarding tying arrangements we would not have this problem. So does Piketty understand this wealth creation mechanism, I doubt it, no French economists I know understand reality. But does the Justice Department, hardly, why they fear the CATV folks, especially those who control news outlets. They may lose votes.

But is there any hope on the horizon? In wireless there is a modicum of competition and an explosion of innovation. Cable is mired in a monopolistic structure supported by wealth transfers from its subscribers. This fact is clearly proven by the recent $2B buy of some sports team. There is a clear expectation of continuing rents providing a significant wealth based rate of return. But for how long?

There has been a long standing assumption that wireless has certain limitations that make it a non-viable competitor for cable or broadband. However, in the past few years, wireless technology has made dramatic strides in many areas that will enable it soon, if not actually now, to become a truly viable competitor to cable and provider of broadband. We present here a few salient points that should be considered when examining the potential of wireless over cable.

Spectrum, Bandwidth, and Capacity; An Explosion: Most people do not understand the sea state change that has occurred in wireless with the introduction of the 4G systems. First spectrum is measured in units of Hz, and a typical allocation of spectrum would be 10 to 40 MHz, millions of Hz. Second, capacity is measured in bps, bits per second. For example the broadband world required capacity amounts well in excess of 1 Mbps, or millions of bps.

In the older generation of wireless one would get 1 Mbps of data for every 1 MHz of bandwidth. The old “rule” was that each 1 Hz of bandwidth could carry 1 bps of capacity. However, with the new 4G wireless systems and the use of OFDM technology one obtains up to 10 Mbps of data for every 1 MHz of bandwidth. That is a tenfold increase. Thus with no additional bandwidth the wireless carriers have almost increased their capacity tenfold!

In the currently designed 5G systems, which to be deployed in less than five years, the multiplier will become as high as 100 Mbps for every 1 MHz of bandwidth. Thus we have the potential for a hundred fold increase in capacity.

This same type of change is not taking place in Cable. In fact, in many ways, Cable is mired in the past, with hubbed and sub-hubbed systems, with coax, often twenty plus years old, buried in locations where now the cost to rewire exceeds $3,500 per subscriber. Wireless can use the same towers, the same backhaul fiber, and the same basic infrastructure. All they need is new electronics at the cell site and new electronics at the user site.

Silicon and the Implosion of Data: As we see capacity of wireless explode, we also see the need for capacity for carrying video implode. Namely we see capacity required for an HDTV channel go from 200 Mbps for uncompressed video down to 4-6 Mbps in compressed video. That is a 50:1 reduction in demand. Capacity is increasing while demand is reduced.

Silicon based data processing enables this change in demand as well in supply. It had been argued before that one can see the concept; “silicon is free”, namely the computer and processing chips that enable these advances have continually dropped in price in a dramatic manner. What was costly and unrealistic two decades ago is now inexpensive and ubiquitous. Every computer terminal can now use a low cost HDTV camera and have the ability to provide compressed video and then transmit it in real time amongst large groups of participants. Likewise, the compressed HDTV can be deployed in real time video-on-demand applications. Every iPhone is now a Telepresence system and every laptop a sophisticated TV Studio!

Explosive Video Capacity on Wireless: As we see, when you increase your capacity 100 fold and decrease your demand 50 fold, there is a potential 5,000 fold change and that is the sea state change we envision in wireless. Unfortunately there is no such change in Cable.

Optimum Spectrum Available: The only significant limitation with wireless has been coverage limitations at higher frequencies, such as 1.8GHz. The 800 MHz bands are reasonably flexible, but the best propagation bands are at 600 MHz, the old UHF bands. The FCC has announced the intention to auction these off. If the major carriers can obtain them directly or even via a secondary sale, which is a highly likely outcome, then the 600 MHz spectrum, some 40 MHz, will allow 4 Gbps per cell site and at 4 Mbps per HDTV channel it will have the capacity of 1,000 video channels simultaneously! The 600 MHz spectrum can also provide excellent coverage since this spectrum “bends” around corners and hills much better than the higher frequencies; after all it is just the old UHF spectrum. This will put the wireless carriers potentially in a directly competitive position to Cable.

End User Technology: Wireless has allowed end user technology to flourish. Thus the iPhone the Android systems and other major advances in technology and technology enable content have been a corner stone of wireless. The wireless carriers merely enable an “air interface”, a small element on a chip in any device and then let the device providers add whatever they can to the units. This strategy has profited them quite well. Many devices, services, and businesses have developed driving the wireless carriers revenues and profits. The wireless carriers now sit on the threshold of being both broadband and video content purveyors.

This is dramatically unlike cable systems which in many ways are akin to the old Ma Bell world; namely, you must get their cable modem and you must get their digital receiver, and it only comes in one color! Even more so, you must purchase their content; whether you view it or not. Wireless is playing a dramatically different game.CATV companies allow nothing at the end user interface. All we get is some old technology cable modem and cable converter. There is no Apple, Google, Qualcomm for CATV as there is in wireless. When did we ever hear of a new set of high tech start-ups for CATV tech? 

The only thing keeping CATV in a position of continuing wealth generation is its monopoly. The only thing keeping the monopoly is the fear by politicians of what CATV channels can do. I suspect that the fear may soon backfire as we see continuing breakthroughs in wireless.

References:

1.      http://www.dailywireless.org/2014/05/19/new-spectrum-cap-rules-transforming-600-mhz-auction//

2.     http://www.fcc.gov/document/fcc-adopts-rules-first-ever-incentive-auction

3.     http://www.dailywireless.org/2014/05/20/600-mhz-what-incentive-for-small-carriers/

4.     http://www.dailywireless.org/2014/05/12/5g-trialed-in-japan-and-south-korea/

5.     http://www.fiercewireless.com/europe/story/5g-networks-should-give-perception-infinite-capacity-say-researchers/2014-05-14?utm_medium=rss&utm_source=feedly&utm_reader=feedly&utm_campaign=rss

6.     http://www.fiercewireless.com/europe/story/docomo-takes-six-partners-tackle-5g/2014-05-09?utm_medium=rss&utm_source=feedly&utm_reader=feedly&utm_campaign=rss

7.     http://www.fiercewireless.com/story/what-attdirectv-merger-600-mhz-auction-rules-and-new-spectrum-screen-mean-m/2014-05-19