THE GILDER FRIDAY LETTER - 09-22-06
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gilder.com | Issue 265.0/September 22, 2006
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HEADLINES:
- The Week / Broadband Brawl: The Debate Over “Net Neutrality”
- Friday Feature / Michael Milken: The Boom Generation
- Friday Blogger Bonus / New And Non-Obvious Software Ideas
- Readings /
Just ONE WEEK left to register …
Gilder/Forbes TELECOSM 2006
October 4 - 6 | The Resort at Squaw Creek | Lake Tahoe
DonR17;t miss the BROADBAND BRAWL, a debate over R20;NET NEUTRALITY,R21; with:
Tod COHEN, VP &Deputy General Counsel, Government Relations, eBay
George GILDER, Editor in Chief, Gilder Technology Report
Peter HUBER, Senior Fellow, Manhattan Institute for Policy Research
Andy KESSLER, Author, Wall Street Meat, Running Money and The End of Medicine
Lawrence LESSIG, Professor of Law & Founder of Center for Internet and Society, Stanford
Paul McWILLIAMS, Editor, NextInning Technology Research
John THORNE, Senior VP & Deputy General Counsel, Verizon Communications
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Click here if you are a member of the press and would like to cover the “Broadband Brawl” or another session at the 10th Annual Gilder/Forbes Telecosm Conference.
The Week / Broadband Brawl: The Debate Over “Net Neutrality”
George Gilder, blog.gildertech.com Intellectuals and politicians mistakenly think of telecom as a perpetual problem: a natural monopoly, an anti-trust peril, a free speech filter, and a forensic circus. Their bright idea of the moment, “net neutrality," is a concept at once so vague and demanding that its penumbra could be litigated in fifty states and up-and-down the federal court system until all our Internet traffic has to be diverted through Seoul and Beijing merely to avoid lawyer spam. By any name, “net neutrality" means price controls on some of the most complex many-sided markets in all industry and thus is sure to do for the rollout of broadband what Sarbox has done for IPOs.
Brian Anderson, “Hands Off the Net” (excerpt):
What ignited the controversy is the possibility that the information bits that make up Internet traffic will no longer enjoy first-come, first-serve treatment, as has generally been the case until now. Freed up by recent Supreme Court and FCC rulings, broadband firms want to manage more actively the data pulsing through their conduits—their cables, fiber optics, phone lines, or wireless connections—offering, for instance, new ultra-fast delivery for sites willing to pay extra, just as FedEx accelerates delivery of packages for a fee. They might offer as well their own additional services, such as online video or telephony, as part of the package.
These changes, critics claim, will wreck the Internet. From an open commons where surfers can access all sites on egalitarian terms, the Net will become a world of “walled gardens,” where “broadband barons” favor certain content (their own) and impede sites unwilling to pay high fees or selling competitors’ products or supporting controversial political views. To stop this, the reformers, organized in a “Save the Internet” campaign …
In truth, however, mandated net neutrality is completely unnecessary. For the telecoms to become site-obstructing bullies would be an odd business model, explains tech guru George Gilder of the Discovery Institute. “The providers have no incentive to kick anybody out,” he says. “They want to get as much content as possible on their conduit. That’s what attracts customers.” This is why bloggers shouldn’t fear that differentiated service will prove an enemy of openness.
Competition will give providers a positive incentive to stay honest. Say Verizon wants to charge Amazon oodles to join the fast lane, and Amazon refuses. Verizon could boot Amazon off its network in retaliation. But zillions of Amazon fans would jump ship to another supplier. “The market works these things out, as it should,” advises regulatory theorist Peter Huber. But meanwhile, many Internet giants like Amazon and Google are backing neutrality…
discovery.org
Capturing impressive long-term gains, Gilder’s tech portfolio is up 293% since the market low in October 2002, compared to 101% for the NASDAQ and just 70% for the S&P 500.
Year-to-date returns for Gilder’s “Telecosm Technologies” companies continue to impress. Equinix is up 51%; Finisar is up 59%; EZchip is up 86%; and Broadwing up 89%!
(Based on performance data analyzed and reported on, on the completely independent www.gtindex.com.)
Subscribe Today: gildertech.com
Friday Feature / The Boom Generation: Seventh Decade
Michael Milken, The Wall Street Journal (09/19/06 excerpt): On July 4, along with more than 9,000 other American post-war babies, I turned 60. Our generation, the 78 million American baby boomers born between 1946 and 1964, has had a profound social and economic impact around the world for more than half a century. As we start moving into our seventh decade, it's logical to ask what effect baby-boomer retirements will have on real estate and financial markets. The question is logical, but it puts the emphasis on the wrong side of the equation. The real future value of U.S. assets won't be determined by retirements, but by policy decisions on education, taxation, regulation, immigration, international investment and the environment.
Baby boomer asset liquidation isn't really a financial market issue because (1) there's plenty of liquidity in the global economy; (2) as the rest of the world becomes wealthier, people outside the U.S. will own a greater percentage of global assets and they'll want to keep a share of their net worth in America; (3) liquidity will grow in both developed and developing nations as they adopt recent American financial innovations and market structures; (4) as baby boomers live longer and healthier, their new mantra will become "Who wants to retire?" and (5) most assets won't need to be sold.
Read Milken’s Complete Article:
online.wsj.com
ATTENTION: Mike Milken to keynote at Gilder/Forbes Telecosm 2006, 12:45 pm on
Thursday Oct. 5. (See: gildertech.com )
The Gildertech Blog, blog.gildertech.com | Logon now to see what’s new.
Friday Blogger Bonus / New And Non-Obvious Software Ideas
Posted by Mike at Techdirt.com:
How Many New And Non-Obvious Software Ideas Are There?
As Europeans are getting ready to debate the idea of software patents again, it's worth noting that, back here in the US, we've already surpassed the yearly record for software patents and it's expected that over 40,000 software patents will be granted in the calendar year 2006. Setting the record isn't that surprising, given that the emphasis on patenting software concepts is a relatively recent phenomenon. However, no matter what you think of software patents in general, is there anyone who actually believes that 40,000 different, unique and non-obvious software ideas came about in a single year? These would be ideas that it's unlikely many others could possibly come up with. If the purpose of the patent system is to encourage the creation of new concepts that otherwise would never see the light of day, does anyone honestly believe that those 40,000 concepts would never show up in a software product if the patent system didn't exist? This is a serious question, especially as our economy relies increasingly on software. If we're locking up 40,000 different software concepts each year, are we actually reducing the ability to actively make use of that software to improve our productivity and grow the economy?
Check out the Techdirt Blog:
techdirt.com
ATTENTION: Join us at 2:40 pm on Friday Oct. 6, for the “Combinatorial Software” panel, aimed at addressing the problem of increasingly complex software at the 10th Annual Gilder/Forbes Telecosm Conference.
(See: gildertech.com )
___________________________________________
Readings /
AEI-Brookings Joint Center Policy Matters/ Net Neutrality
aei-brookings.org
Forbes.com: Does Big Beat Fast?
forbes.com
Projector size of sugar cube made
physorg.com
Recession-Risk Redux
article.nationalreview.com
Repeat The “Inflation” Tax
article.nationalreview.com
Seybold: Spectrum -- The Wireless Industry’s Currency
outlook4mobility.com
Big Media Touts Internet Plans Even As Yahoo Slips
informationweek.com
Tech Awards To Recognize World Change
mercurynews.com
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