Facebook’s International Business Blunder: Following In The Footsteps of Google

With good intentions, and also a good dose of Facebook business strategy to expand its base of users, Mark Zuckerberg has struck out to promote Free Basics, a free limited Internet for the poor in less developed countries sponsored by Facebook and its local telecommunications partners. While on the face of it Free Basics would seem to have merit, Zuckerberg has run into a wall of opposition.  On close inspection of the details, Facebook’s problem, despite all of its global corporate sophistication, appears to be naïveté about the foreign markets it is trying to enter. It is possible to argue that Zuckerberg and Facebook have the best of intentions and sound arguments.  But the best of intentions and sound arguments mean nothing if the key element lacking is a clear understanding of the targeted foreign market, and the crucial need to adapt to it or fail.  Zuckerberg could have looked no further back than 2013 for clues to why he has failed.

In 2012 and 2013, I was involved in an effort to deploy wide area wireless Internet capability to broad swaths of India. This involved working with large Indian corporate partners. We were also working at a time when Google, Microsoft, and others were also busily competing to deploy so-called “white space Metro WiFi” to rural areas in lesser developed countries. Google was also experimenting with its “loon balloon” project to use high altitude balloons to deploy Internet access points in remote areas.  It quickly became clear to us that the Indian government and corporate officials wanted only an indigenous Indian Internet solution, which fit our strategy of working with Indian partners.  Google and the other big U.S. based companies were viewed as neo-colonialists. Ironically, on March 19, 2013, Google Chairman Eric Schmidt wrote an editorial in The Times of India, “Which Internet Will India Choose,” in a well-intentioned effort to convince Indian leaders of the Google vision for the Internet in India.  For all intents and purposes, Schmidt’s editorial landed on deaf ears in India.  Also, regrettably, Indian corporate culture being what it is, not much happened on the Indian side to develop their own Internet deployment solution. All of this is not unusual in foreign markets.

Read more: Eric Schmidt: Which Internet Will India Choose?

As a veteran of high technology international business, I am intrigued by these international business blunders by otherwise very sophisticated business leaders and corporations.  They seem to repeat themselves over the years, sometimes in different ways and in different markets. Years ago I stumbled on David A. Ricks book, Blunders in International Business, now in its fourth edition, with new and updated case studies.  It is enlightening and also quite funny.  I recommend the book to Mark Zuckerberg.

Mark Zuckerberg can’t believe Egypt  & India  aren’t grateful for Facebook’s free internet

The nerve. (AP Photo/Rajesh Kumar Singh)

December 28, 2015Quartz India

All Facebook CEO Mark Zuckerberg wants to do is make the world a better place for his new daughter. While he’s technically on paternity leave, he couldn’t sit idly by as India attempts to halt Internet.org, Facebook’s initiative to provide free but limited internet to the developing world.E

Last week, the Times of India reported that the country’s telecom regulatory body had asked Facebook’s partner, wireless carrier Reliance, to cease the Internet.org service as it determines whether operators should be able to price their services based on content. Responding to criticisms of the program, Zuckerberg penned an op-ed published Dec. 28 in the English-language daily. In it, he expressed annoyance that India is debating net neutrality—a principle dictating that telecom operators provide people with equal access to the internet—as the country struggles to connect its citizens to the internet.

In the process of defending Internet.org, Zuckerberg paints India—where about a billion people are not connected to the internet—as backwards for even daring to question the benefits of Facebook’s charity-like endeavor.

“Who could possibly be against this?” he asks passive-aggressively. “Surprisingly, over the last year there’s been a big debate about this in India.”

Yes, net neutrality is a big deal—and not just in India. In the US, for example, an appeals court is currently examining the legality of a new set of net-neutrality rules enacted by the Federal Communications Commission this year. But Zuckerberg almost portrays net neutrality as a first-world problem that doesn’t apply to India because having some service is better than no service.

Net neutrality activists have long argued that Internet.org provides a “walled garden” experience because the sites that users can access for free are determined by Facebook and its telecom partners, essentially making them gatekeepers to the internet for poor people.

While Zuckerberg acknowledges that Internet.org, which is currently active in more than 30 countries, does not provide people with access to the full web, he argues that it’s a step in the right direction. According to the Facebook CEO, half of the people who come online for the first time using Internet.org decide to pay for full internet access within 30 days.

Instead of wanting to give people access to some basic internet services for free, critics of the program continue to spread false claims–even if that means leaving behind a billion people.

Instead of recognizing the fact that Free Basics is opening up the whole internet, they continue to claim–falsely–that this will make the internet more like a walled garden.

Instead of welcoming Free Basics as an open platform that will partner with any telco, and allows any developer to offer services to people for free, they claim–falsely–that this will give people less choice.

Instead of recognizing that Free Basics fully respects net neutrality, they claim–falsely–the exact opposite.

Zuckerberg continues by offering an anecdote of a farmer named Ganesh, who uses the free internet service to check weather updates and commodity prices. “How does Ganesh being able to better tend his crops hurt the internet?” he asks rhetorically.

But examined more closely, his arguments don’t directly address the concerns of net neutrality activists. For the people who choose not to upgrade or can’t afford to pay for full internet access, Internet.org does indeed provide a walled garden of online content. Millions of people already have a skewed perception of the web, believing Facebook to be the internet, a Quartz analysis has shown.

Furthermore, while Facebook can add more telecom partners, which would theoretically open up the number of sites and services Internet.org users could access for free, it currently has only one partner in India, Reliance.

Zuckerberg also fails to address the claims that zero-rated services such as Internet.org amount to economic discrimination—that this is essentially poor internet for poor people. Furthermore, in an op-ed published in the Times of India in October, net-neutrality advocacy group Savetheinternet.in quoted Tim Berners-Lee, father of the internet, as saying: “Economic discrimination is just as harmful as technical discrimination, so [internet service providers] will still be able to pick winners and losers online.” Facebook’s walled garden could very well determine the sites and services that will succeed in India.

Over and over again, Zuckerberg has pointed to research showing that internet access can help lift people out of poverty. The fact remains that Internet.org provides limited, slow, and subpar access, and these limitations make it all the more difficult for people to climb the economic ladder. As Naveen Patnaik, chief minister of the Indian state Odisha, has said: “If you dictate what the poor should get, you take away their rights to choose what they think is best for them.”

The Digital Utopian Vision of Marshall McLuhan and Stewart Brand Is Cracking

It appears to me that the original vision and promise of the Internet, referred to by many as Digital Utopianism, is at severe risk of deteriorating into a “balkanized”  and severely impaired World Wide Web.

Internet barriers, censorship, protectionist Internet policy, and ubiquitous surveillance seem to be the emerging new reality.  Notable digital luminaries the likes of Vin Cerf and Bill Gates have been questioned on this point, and both have expressed no major concern about deterioration of the freedom of the Internet or with the original Utopian vision.  The argument is that the World Wide Web cannot be effectively blocked or censored.  Google would probably respond that their “loon balloons” could simply be launched to counter censorship. As a long time Silicon Valley high tech executive, I understand this optimistic view, but the facts on the ground are now providing serious evidence that the Internet is under attack, and may not survive unless there is a significant shift in these new trends.

This week alone, Turkey’s Erdogan has tried to block both Twitter and YouTube to prevent Turks from viewing evidence of his corrupt government. This morning’s New York Times reports Edward Snowden’s latest revelation.  While the U.S. government and media were investigating and publicly reporting on Chinese government Internet espionage and Chinese network equipment manufacturer Huawei, the NSA, the British GCHQ and Canada’s  Security Intelligence Service (CSIS) ,  were all collaborating, doing exactly the same thing. The hypocrisy and irony of this is not lost on either the Chinese or the Internet community. CBS 60 Minutes reported on the Chinese espionage, but has been essentially silent on NSA’s own transgressions. 60 Minutes even broadcast a report that NSA metadata was essentially harmless, which has now been shown to be false. The 60 Minutes objective reporting problem is the canary in the coal mine of the corporate takeover of media and the Web.  Protectionist policies in various countries targeted against Google, Microsoft and others are emerging. One of the many negative effects of the NSA revelations was the announcement this week that the United States was giving up control of the International Committee for Assigned Names and Numbers (ICANN), which essentially sets Internet traffic policy. Finally, this week, Netflix spoke out forcefully against the “peering agreement” it was blackmailed into signing with Comcast to insure “quality of service” (QOS) for Netflix programming to the edges of the Web.

Read more: NSA breached Chinese servers

Read more: Netflix Thinks Peering Should Be A Net Neutrality Issue

I recently came across Professor Fred Turner, Professor of Communication at Stanford. It has been a revelation for me.  His book, “From Counterculture to Cyberculture’ is an acclaimed milestone work. Turner has articulated the World I lived in the counterculture of the 1960’s and in the early Silicon Valley. His work explaining the evolution from the “counterculture” of the 1960’s to the emerging new “cyberculture” of the late 1980’s and 1990’s is an excellent record of that time in northern California.  This was the World of Steve Jobs at that time and his personal evolvement to a digital Utopian.  It is detailed in Jobs biography, and in Jobs wonderful Stanford University 2005 commencement speech, in which he also acknowledged the importance of Stewart Brand and the Whole Earth Catalog.  This was also my countercultural World as a Communications student at San Jose State at that time, in the heart of the Silicon Valley, and subsequent high tech career, beginning at Intel Corporation.  But even Professor Turner has expressed his own ambivalence about the future direction of the Web, though only from the standpoint of less worrying lack of diversity of Web communities. My concern is much more deeply based on current evidence and much more ominous.

Fred Turner, Stanford Professor of Communication – Counterculture to Cyberculture

Stewart Brand, the father of the Whole Earth Catalog and the original digital utopia visionary, has been rethinking its basic concepts. Brand has come around 180 degrees from environmental Utopianism based on “back to the land,” and is now embracing the future importance of urban enclaves. While this new urban view is now a widely held idea by many futurists, it can also be viewed as another facet of the end of digital utopia.  This TEDTalk by Brand lays out his new vision.  Where we go from here is anyone’s guess.

Setback for Net Neutrality May Actually Speed Its Adoption

Yesterday, the United Stated Federal Court of Appeals in Washington, D.C. issued a ruling that was essentially a “technical” setback for the notion that all Internet traffic should be treated equally, better known as Net Neutrality. The ruling now permits giant corporations like Verizon, NBC/Comcast, and Time Warner to charge higher fees to content providers like Netflix, Amazon and even potentially, Google.  If that sounds bad for consumers, you are right.

This Court decision has even deeper implications as NBC/Comcast is in the unique position of being both a “carrier” of the Internet bits, and a “content provider.” The enables Comcast to charge higher fees to content providers for content that competes with NBC. Is that anti-competitive? Sure sounds like it to me.

This decision was essentially caused by an earlier decision of the U.S. Federal Communications Commission to maintain a free and open “hands off” policy, and not regulate Internet traffic, considered evil by Internet purists.

But the effect of this Court ruling may be greater evil, leading to the conclusion that “common carrier” regulation of the Internet may be the lesser of the two evils, and an inevitable outgrowth of the NSA Internet espionage revelations, Chinese military Internet espionage revelations, and “balkanization” of the Internet by foreign governments, building protectionist national firewalls, and just plain old Internet traffic snooping of your privacy.   It is like what happened to the Summer of Love. The Internet was originally about free love, but before long the whole thing deteriorated into a jungle. That is what we have now, and by the simple decision of the FCC to declare the Internet a “common carrier,” a regulated telecommunications infrastructure, corporations would need to implement Net Neutrality and report their Internet traffic policies to the government.  For those who hate government regulation, I agree in principle. Sadly, it is the corporations, and the NSA that have made this imperative, to insure transparency, equality, and some level of Internet privacy.

In February of 2013 I wrote on this blog about the problem, and the book Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age, by Yale Law School Professor Susan P. Crawford.

Read more: Why Internet Neutrality is so important

Why Net Neutrality Is So Important: The Telecom Industry And Monopoly Power

Yale Law Professor, Susan Crawford on Why U.S. Internet Access is Slow, Costly, and Unfair

If you think that the U.S. and Canada are global leaders in Internet broadband development, think again.  Despite recent improvements in broadband connectivity, the US and Canada still lag behind when compared to other developed nations. To quote FCC chairman Julius Genachowski, “We are at risk in the global race for economic leadership …curtailing Canada and the US from earning top positions in the global bandwidth race.”   Many other countries, notably South Korea and in Europe, France, Finland and the Netherlands are far ahead of us in terms of providing World Class Internet connectivity.  Genachowski has declared a Gigabit to the City campaign to dramatically upgrade domestic connectivity by 2015.  Regrettably, this is similar to Genachowski’s pronouncements on what he has termed, “Super-Wifi“, which I have explored in my earlier post on this blog.   It is the enormous monopoly political power of the telecommunication industry that is blocking the public interest and U.S. global economic leadership. Read more: http://mayo615.com/2013/02/08/urban-legend-of-free-wi-fi-for-the-masses-devil-in-the-details/ 

In the video interview with Bill Moyers, Ms. Crawford graphically makes the point that in Hong Kong and Seoul it is possible to get 500Mbit Internet connectivity via fiber link for $25 per month. Competition is so fierce that it is normally installed in one day.  By contrast, I ordered 100Mbit service from Shaw Cable here, which was priced at $100 per month.  Despite adding the charge to my monthly bill, Shaw was unable to demonstrate that they could deliver anything greater than 53Mbits, for which I now pay $50 per month.  Hong Kong offers 10 times the bandwidth at half the price.

Susan Crawford, former special assistant to President Obama for science, technology and innovation, and author of Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age, joins Bill Moyers to discuss how our government has allowed a few powerful media conglomerates to put profit ahead of the public interest — rigging the rules, raising prices, and stifling competition. As a result, Crawford says, all of us are at the mercy of the biggest business monopoly since Standard Oil in the first Gilded Age a hundred years ago.

“The rich are getting gouged, the poor are very often left out, and this means that we’re creating, yet again, two Americas, and deepening inequality through this communications inequality,” Crawford tells Bill Moyers.

Susan P. Crawford (born 1963) is a professor at the Benjamin N. Cardozo School of Law. She has served as President Barack Obama‘s Special Assistant for Science, Technology, and Innovation Policy (2009) and is a columnist for Bloomberg View. She is a former Board Member of ICANN, the international organization that regulates the Internet Protocol, the founder of OneWebDay, and a legal scholar. Her research focuses on telecommunications and information law.

Susan Crawford, “Captive Audience, the Telecom Industry and monopoly power in the new gilded age.

Tubes, A Journey to the Centre of the Internet, byAndrew Blum

from BillMoyers.com. Video interview via Vimeo. Bill Moyers & Company

Bill Moyers. com

Julius Genachowski, FCC  global race

 

The Humble Thermostat: Another Strategic Web Battle

The Ecobee Smart Thermostat, fully Internet capable

For years thermostats have been ugly and downright stupid devices that sit neglected on our walls. But over the past 18 months the connected thermostat has morphed into a gadget that has been drawing the attention of some of the most cutting-edge software startups, which are looking to use it to connect with utilities and consumers.

Unbeknownst to many, a Canadian company in Ontario, Ecobee, has been at the forefront of the smart thermostat market for quite awhile. The Ecobee device is fully integrated with the Internet, and does all of the things you might expect an Internet connected thermostat to do, using your smart phone while away in Zanzibar to monitor your home.  I quite like Ecobee.  But it would be another Canadian innovation tragedy if Ecobee got run over in this growing global battle, as has happened with so many Canadian companies.  I would be happier to see Ecobee begin acting like the global market player it is, attracting  major capital and Big Dog strategic partners.

But the market has been heating up for some time and many major technology players and lots of big Silicon Valley money are now in the fray.  A BC Hydro trial of advanced Smart Grid, solar heating, and Smart Meter (called Advanced Meter Initiative or AMI in BC) technologies has been going on quietly for some time on Vancouver Island. Another FortisBC trial is due to begin in the Okanagan sometime in the near future.  Home energy management networks are set to grow from being in 2 percent of U.S. households in 2011 to 13 percent, or about 16.2 million households, by 2015.

Intel Intelligent Home Management Console, a reference design for OEM’s

Cisco Systems, General Electric, Google, Honeywell, Microsoft and Intel, along with a host of other companies are now focused on this home energy management market, developing new products and technologies that will be in our homes shortly.  Siemens spin-off startup, EnOcean, and the EnOcean Alliance are also part of this complex market mix.  EnOcean is the current leader in a related technology, “energy harvesting”, which will likely be one of the future major drivers in energy efficiency. Many home appliances are already “Internet ready.”  This is obviously an area of major global corporate competition.

So take another look at that ugly thermostat on your wall. Things are about to change.

For the record, I am not impressed with all of the Luddite hype opposed to smart meters.  One of BC’s environmental celebrities (not David Suzuki) is an opponent of wireless smart meters, citing anecdotal research on the health dangers of radio waves generally, but not on smart meters specifically.    On the one hand, this person decries climate change deniers who refuse to accept science, while he simultaneously denies science on radio signal propagation.  I follow this area of research fairly closely and have yet to see any convincing study that points to health problems with the radio signal propagation of smart meters.  I am a follower of Nikola Tesla, the recently resurrected “father of electrical energy generation and distribution”, who endeavored to dispel superstitions about electricity.  Unfortunately, many of those superstitions persist.

A Khosla Ventures-backed energy analytics startup called Bidgely is the latest to go after the next-gen smart thermostat, and it has told us that it has an agreement with thermostat maker Emerson to commercialize a thermostat in the coming months that syncs with Bidgely’s energy software. Bidgely’s algorithms can take home energy data and section out which appliances in the home are consuming what amount of power, without having extra hardware or sensors on each plug or appliance.

Consumers that can get that type of data can see, for example, if their pool pump is consuming too much energy in the winter time, or if their air conditioning unit is sucking down much more power than the average (see itemized bill). Utilities could offer such a smart thermostat to customers in their areas that want to be included in energy efficiency programs. Emerson’s thermostat wirelessly connects to smart meters or a home router with a Zigbee connection.

The deal between Emerson and Bidgely isn’t all that unique in the rapidly growing energy software sector. Emerson is also working with other software startups like EcoFactor, EnergyHub, and Calico Energy to have its thermostat sync with their software, too.

Next week at a major utility conference called Distributech, all of the energy software startups and large energy giants will be touting their smart, connected thermostats; including both new thermostat models and new services. The thermostat is a unique device. It’s an object that can provide demand response services for utilities, or the collective turning down of utility customers’ energy use during peak times (like a hot summer day in Texas). Software startups like EcoFactor can create algorithms that can do this, without making the climate of a home uncomfortable for the inhabitant.

The thermostat is also the latest device to become part of the growing world of the Internet of Things. In this always-on connected ecosystem, everything gets a connection, all devices are made smarter with software and data and these devices can make human lives easier, more interesting or more efficient.

Nest is one of the few that’s aggressively targeting consumers. Most of the energy startups are aiming for the utility market. One of the better known collaborations around a thermostat maker and an energy software company is between Opower and Honeywell. Honeywell is the giant in the thermostat maker market, and Opower is the leading energy software player.

Make sure to watch the buzz around smart thermostats and the entire market area defined by energy efficiency monitoring and management, in both commercial and home applications.

 

In Memoriam: Aaron Swartz, Internet Activist, RSS Pioneer, and Co-Founder of Reddit

Aaron Swartz, Internet Visionary Has Left Us

UPDATE

Tweet from (Sir) Tim Berners-Lee on the death of Aaron Swartz”  “Aaron dead. World wanderers, we have lost a wise elder. Hackers for right, we are one down. Parents all, we have lost a child. Let us weep.” And the web wept.

Today the blogosphere and media have lit up with tributes and obituaries to Aaron Swartz: not least of these include The Economist Magazine “Babbage” editorial page, and The Harvard Business Review blog

Read more, Babbage, The Economist:  http://www.economist.com/blogs/babbage/2013/01/remembering-aaron-swartz?fsrc=nlw|newe|1-14-2013|4609454|34901933|NA

 Read more, HBR blog:   http://blogs.hbr.org/cs/2013/01/aaron_swartzs_crime_and_the_bu.html

ORIGINAL POST

Only 26 years old, Aaron Swartz took his own life late last week.  Swartz was an Internet intellectual giant, recognized as such since his early teenage years..  We have lost a second generation Internet visionary..someone who could have helped us get to the next level of The Global Village..

At the age of 14, Swartz was credited with inventing RSS, known as “rich site summary,” a format for delivering to users content from sites that change constantly, such as news pages and blogs. We all use it.

The problem was that the powers that want corporate control the Internet did not like Aaron.. They want us to pay big corporations big bucks and they see the Internet as a threat to their power.  I personally view Swartz’ suicide as an existential act of immense courage, making the ultimate statement with his life, screaming at us that we need to “wake the fuck up”  as Samuel L. Jackson screamed at us in his viral video, during the US Presidential campaign.

Swartz faced trouble in July 2011, when he was indicted by a federal grand jury of wire fraud, computer fraud and other charges related to allegedly stealing millions of academic articles and journals from a digital archive at the Massachusetts Institute of Technology.

According to the federal indictment, Swartz – who was a fellow at Harvard University’s Edmond J Safra Center for Ethics – used MIT’s computer networks to steal more than 4 million articles from JSTOR, an online archive and journal distribution service. JSTOR did not press charges against Swartz after the digitised copies of the articles were returned, according to media reports at the time.  So why did the US Attorney insist on driving Aaron to commit suicide?

Swartz, who pleaded not guilty to all counts, faced 35 years in prison and a $1 million fine if convicted. He was released on bond. His trial was scheduled to start later this year.  Many legal scholars who have studied the case,  have described the US federal prosecution as a travesty, and out of all proportion to the facts..

Most importantly, if the United States views the Internet as a strategic national security resource, they completely fucked up by forcing the suicide of one of its most important new geniuses. You can’t get more fucked up than that. 

On Saturday, online tributes to Swartz flooded across cyberspace. “Aaron had an unbeatable combination of political insight, technical skill and intelligence about people and issues,” Cory Doctorow, Canadian blogger and science fiction writer, co-editor of the weblog Boing Boing, wrote on the site. Doctorow wrote that Swartz had “problems with depression for many years.”  Depression, mood swings and even bipolar disorder are commonly associated with extremely bright people.

We lost Steve Jobs.. Now we have lost Aaron as well.  He could have been our next generation Marshall McLuhan, showing us the way…. But it was not to happen.  I am so angry I could spit.