WordsByNowak

I promised in January that I’d write up my technology predictions for 2011, but given that we’re already a quarter done the year, that would seem kind of foolish. I was actually always leaning toward taking a further-out view into the future anyway, as it’s not only more fun but also harder to be wrong (ahem). In that vein, given that I’m currently on vacation in Thailand, I thought I’d kick off 10 days of predictions of where we’ll be 10 years from now. I hope you enjoy.

Let’s start with computers, which are a hot topic right now given the recent performance of IBM’s Watson on Jeopardy. Watson’s ability to make its super-smart human opponents look like tools on the game show has been thoroughly discussed and analyzed. One of the more interesting takes appeared in the Ottawa Citizen, which postulated that Watson’s performance was not completely unlike the Wizard of Oz - it was actually an illusion that required someone behind the curtain to pull the strings.

Most commentators, however, gravitated toward how Watson figures in to the issue of the Singularity, or the upcoming point in time when computer intelligence outstrips our own, thereby resulting in a new world that is currently hard for our mere human brains to imagine. The Singularity is something a number of futurists, most notably Ray Kurzweil, have pondered for years. I’ve been knee deep in it for several months, since I read Kurzweil’s latest book, The Singularity is Near, and it will actually be somewhat central to my next book (check out my interview with Kurzweil from a few months back).

This event won’t arrive in the next 10 years - Kurzweil thinks 2045 is the year when everything will change - but what is very likely to happen is that computers will in fact become more powerful than humans. And by powerful, I’m talking strictly about their computational ability. Super-computers such as Watson, which is capable of 80 trillion operations per second, will continue to see the benefits of Moore’s Law - where computational ability roughly doubles every 18 months - for the next decade. By that measure, super-computers in 2021 will be capable of more than five quadrillion calculations per second.

Many very, very smart people have tried to estimate the computational ability of the human brain based on what we know about the organ - how many neurons it has, how fast they operate, and so on - and there have been various conclusions. The one I’ve seen most often seems to estimate the human brain as capable of 100 million MIPS, or millions of instructions per second. I’m no mathematician, but that’s less than what the most powerful computers will be capable of in 10 years.

What does this mean? Well, there are a few things to keep in mind. Firstly, much of our brain’s computational ability is spent on running the body - regulating our organs, making sure we blink, walking and chewing gum at the same time, etc. One idea that fascinates me is what might happen if we could perhaps outsource some of these mundane tasks to a computer that we wear? If we freed up most of our brain power, could we possibly orient it toward more productive uses? Perhaps, but that’s getting outside the scope of the next 10 years.

Indeed, although super-computers that have more brute power than the brain are likely in the next decade, their true impacts won’t be felt just yet because of their size and cost. Watson, for example, is actually made up of 10 refrigerator sized stacks and cost several billion dollars. It’ll likely take another decade just to get such computers down in size and cost to the point where they can have a mainstream effect. Of course, by 2021, we’ll have Watsons on our desktops and smartphones, so it’s all relative.

These super-computers are already affecting change in the world, although it’s in ways we don’t really perceive. If you don’t believe me, open up a new browser tab and do a Google search on something, anything. If you’re amazed that the search engine seems to complete your query before you even type it, well, welcome to super-computers in action. Faster and smarter machines are already analyzing and interpreting our data for us. This sort of stuff is going to be all around us over the next decade.

The real fun begins when these super-computers start to interact with human brains. Our organic matter doesn’t directly benefit from Moore’s Law like computers do, but as I’ll detail in tomorrow’s prediction, the brain will in fact be redefined over the next 10 years.

I’m off for a vacation in Thailand today but fear not, there’ll still be plenty of blog for y’all to read while I’m gone. On Monday, I’ll begin a special series looking at my 10 technology predictions for the next 10 years. I promised earlier this year to give predictions for 2011, but I figured the decade ahead would be more fun.

In the meantime, enjoy this music video - featuring a song that will inevitably be stuck in my head for the next three weeks:

Fun fact: did you know the singer, Murray Head, is the older brother of Anthony Head, who played Giles on Buffy the Vampire Slayer? As the ads on Global TV would say, “huh.”

It’s been a fun week in blog land. It all started on Friday, when I noticed the Maclean’s editorial on usage-based billing. I let it sink in for a day then got to work writing up my rebuttal on Saturday. After about two hours of furious typing, I hopped on to Twitter and was surprised to see that Industry Minister Tony Clement was just as steamed by the editorial as I was, and for many of the same reasons. Wouldn’t you know it, when I actually published said blog post on Tuesday, a good deal of people felt the same way.

I’ve been running my blog for almost two full years now, with posts going up every week day. That UBB post, however, is far and away my most read. Comment-wise… well, wow. Most independent bloggers are happy to get one or two bits of feedback on what they’ve written. Hell, there are many days when there’s a “zero” in the comments section here. But, as of Wednesday afternoon, I had more than 50. That’s unprecedented.

That means that, all of a sudden, I had a new concern: that Godwin’s Law might eventually kick in. Not familiar with Godwin’s Law? That’s okay, I wasn’t either until recently. I sort of knew it happens but I didn’t actually know there was a name for the phenomenon. From Wikipedia, author Mike Godwin’s adage states that “as an online discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches 1. In other words, Godwin put forth the hyperbolic observation that, given enough time, in any online discussion—regardless of topic or scope— someone inevitably criticizes some point made in the discussion by comparing it to beliefs held by Hitler and the Nazis.”

Fifty comments is a lot for my little blog, so inevitably not all of those comments were going to agree with what I had written. Some didn’t, and they inspired the beginnings of some name calling from others. As of Wednesday afternoon, it hadn’t yet devolved into full-blown conflict, but for the first time, I was actually worried it might. Sooner or later, I thought, someone is going to drop the Hitler bomb. Wow, my little blog is all grown up now.

The threshold has already been passed in the larger usage-based billing discussion though. I’m fairly sure someone, somewhere has been compared to Hitler during the whole thing, but moreover, someone put together a video starring Der Fuhrer giving his thoughts on UBB. The video clip is from the Tom Cruise World War II movie Valkyrie Downfall and it’s been subtitled and mashed up by people to satirize a number of causes. It’s a trite concept, but I’ve watched Hitler’s take on UBB half a dozen times and have laughed myself silly each time. If you haven’t seen in, watch it. And if you already have, check it out again:

Now then, I suppose I have a new goal as a blogger: to get Hitler invoked in the comments section of all my posts. It’s clearly a sign that you’re doing something right.

Amidst all this usage-based billing and Wind Mobile nonsense that’s been going on for the past few weeks, there’s been a lot of talk about the Canadian government finally doing something about the restrictive limits on foreign ownership of Canadian telecom companies. I’ve been whining about it for years, so hearing others support it is of course music to my ears.

But, while removing the restrictions is the right thing to do to bring Canada economically in line with the rest of the world, I’ve long wondered whether we need to make the move for an entirely different reason: do we need foreigners to come in and teach us how to compete?

I’ve touched on this before, but I don’t think I’ve ever outright pondered whether there’s just something about Canadians that makes us innately less competitive with each other and the rest of the world. And if so, is that a bad thing? As the stereotype goes, Canadians are considered peaceful and polite folk who live above their brash and boisterous neighbours. If that view is actually true, do we also apply it to how we do business?

The example I always bring up to friends is the corner of Queen and John streets here in Toronto. For as long as I can remember, there has been a (Canadian-owned) Second Cup coffee shop on the southwest corner, across the street from MuchMusic. At some point years back, I can’t remember when, a (U.S.-owned) Starbucks opened up directly across from it, on the northeast corner. That always struck me as a very American thing to do - open up right next to your competitor and try to drive them out of business. The Canadian thing to do, I think, would be to find a different location a few blocks away and open up there. That way everyone can get a share of the pie, rather than fight it out tooth and nail for the same customers.

It’s an isolated anecdote, but we see it in telecom. The other day, I mused on Twitter why B.C.-based Telus doesn’t sell residential internet access in Ontario and Quebec, either as a reseller using Bell’s or Rogers’ pipes or by building its own, to compete head on with those companies. I was reminded privately by an acquaintance who knows something of the situation that it indeed nearly came to pass - Telus was looking to do exactly that a few years ago, but ended up chickening out because it was afraid that Bell would retaliate by selling internet service on its own turf out west.

In some ways, that’s understandable - no one really wants to start a turf war. But in other ways, it’s inexcusable and anti-capitalist - if your mission isn’t to put the other guy out of business, you shouldn’t be in the game. In other words, it seems to be the Canadian way of doing business versus the American way. Which is better? I’m not sure. But one certainly is more purely capitalist than the other.

Another good example is the “gentlemen’s agreement” between Shaw and Rogers, which has apparently existed in secret for years. How this one escaped the attention of our Competition Bureau is a mystery… or maybe it’s not - maybe the bureau was just being thoroughly Canadian by letting it slide. When Shaw tried to buy Ontario-based Mountain Cable a few years ago, Rogers sued, claiming the deal violated an agreement the two big cable companies had to not compete on each other’s turf. Shaw countered, saying no such agreement existed because if it did, it would have been illegal. Really? You don’t say.

There are occasions where the big telecom companies do sell services on each other’s turf - wireless is, of course, an example, while Shaw does sell satellite TV outside of its western base. But in all cases, no one really goes for anyone else’s throat on enemy territory because - like the Telus internet situation - they’re afraid of retaliation back home.

If we open the doors to foreign companies, they will harbour no such fears. AT&T, Verizon, Vodafone and the whole lot have absolutely zero to be afraid of when it comes to Bell, Rogers, Shaw and Telus - it’s not like any of our domestic companies are in any position to encroach on the invaders’ home turf. That’s really why I’ve always been a proponent of lifting the restrictions; doing so may not solve all our problems, but it certainly will lift the veil of coziness (or fear-induced inertia, whichever way you prefer to look at it).

Doubtlessly, that Second Cup on Queen and John was forced to up its game when Starbucks came in. The fact that it has survived is perhaps proof that Canadians can compete against larger, better-funded rivals. This could apply in telecom too. Then again, coffee is one game while tech and telecom are another.

We all know the story with Nortel. Canada’s big international success story one day, all but erased from existence the next. Many people are now wondering if BlackBerry maker Research In Motion is basically Nortel 2.0. RIM did well when its only smartphone competition was Nokia, but it hasn’t been looking too good since Apple and Google - American companies - entered the picture.

If Canadians do have some sort of competitive deficiency, it’s probably been ingrained in our identity over the course of decades. Over that time we’ve been told that Canadian culture - whether it’s books, music or television - needs to be propped up and protected to keep us from simply being absorbed into Americanism. Combined with protectionist laws like our telecom ownership restrictions, this has ironically insulated us from the rest of the world. Canadians like to think we’re more worldly than Americans, but are we really? Their culture goes out and conquers the world while we sit and jealously guard ours.

It’s disappointing to see this insularity encouraged by our government. I was quite peeved to see Conservative attack ads mock Liberal leader Michael Ignatieff for the fact that he left Canada to find success abroad, that doing so somehow made him less Canadian. I don’t care what Ignatieff’s political stripes are, I say good for him for going out into the world and competing against everyone else. That’s something we should all be striving for. (And please don’t construe this as support for Ignatieff or the Liberals… I’d support any member of any party for doing the same.)

I know it’s provocative and possibly offensive to impugn on our ability to compete, and there are countless examples of Canadians being world beaters in all walks of life, but as far as business goes what do you think, realistically: are we competitive? Or do we need a good foreign ass-whooping to get us going?

The usage-based billing fracas has calmed down considerably over the past few weeks, but a few people continue to beat the drum in support of it despite the fact that it’s looking dead in the water. UBB is, if you’ve forgotten, essentially an increase in prices by big internet providers on a wholesale service they provide to smaller rivals. The increase means it’ll be a lot more expensive, if not impossible, for smaller ISPs to offer the large internet usage buckets they’ve been selling.

People got freaked out over this and hundreds of thousands signed an online petition, prompting the government to promise it will overturn the plan if the regulator, the CRTC, doesn’t do so first. The CRTC is going back to the drawing board and UBB is in a holding pattern until this all gets resolved, if it ever does.

Still, some folks - like the editorial writers at Maclean’s - continue to maintain that UBB is the right way to go. Supporters usually latch on to one or both of the arguments of fairness - that heavy internet users should be forced to pay more - or that bandwidth is like a utility. Many commentators, myself included, have argued against these talking points but evidently they still continue to percolate. Here then, are 10 reasons why the arguments for UBB don’t hold water.

10. Data is not a utility. There have been many attempts, including by the CRTC, to equate internet usage to a utility such as electricity or gas. Very simply put: it is not. The electrons that make up the data that passes to and fro over the internet are limitless and are not consumed and destroyed every time a YouTube video is watched. The “pipes” and other equipment over which these electrons flow are, of course, finite and therefore need to be continually expanded as the amount of traffic grows. These are two very different things, however. In electric-bill parlance, we’re talking about delivery and usage - the nice people at the hydro company bill us for both and the big ISPs would like to do the same. The difference is, the actual kilowatts that go over the hydro company’s pipes ARE finite and ARE destroyed once they are used. If you want to talk about fairness, then yes, it is okay to charge internet users for delivery, but how is it fair to charge for consuming a non-consumable?

9. Delivery cost is paying for expansion. In 2003, the average Canadian household spent $170 a year for an internet connection while in 2009, it was $340. There was a big shift by many from dial-up to broadband over that time, but the fact remains: the price we pay for delivery has doubled in six years. That’s a higher increase than just about any service over that time, with the possible exception of television, which not coincidentally is sold by the same companies. Shouldn’t this tremendous increase cover the cost of all the necessary network upgrades?

8. Congestion has not been proven. Okay, so the amount of data going over ISPs’ pipes is growing continually, which means that unless they’re expanded, they’re going to get congested, right? Well, the big ISPs like to tell us about the billions they invest in their networks, so the expansion is presumably happening. The congestion issue was at the forefront a few years ago during the whole related throttling/net neutrality hearing before the CRTC, where Bell Canada was being investigated for slowing peer-to-peer software usage. Bell argued that it needed to slow down greedy peer-to-peer users because they were congesting the network, yet all of the data presented to the CRTC that supposedly proved this congestion was heavily redacted for “competitive reasons.” No one but the CRTC has seen this data, so we have only the word of Bell and the regulator that congestion did exist, and that it continues to. Given that the throttling seems to be in effect 24 hours a day, including during the middle of the night when presumably very few people are using the network, this seems to suggest that congestion is not a problem and that these measures are in place for an entirely different reason.

7. Investment is not making big ISPs poor. In fact, it’s anything but. Bell just posted a 13% increase in annual profit over last year, driven by “strong growth in its wireless, internet and television subscribers.” Indeed, the number of Bell internet subscribers grew by 2% from last year. The song the company likes to sing is “boo hoo, all these heavy users are forcing us to spend zillions on upgrading our infrastructure,” but that investment doesn’t appear to be hurting the bottom line. If anything, it’s helping.

6. Heavy users are not all pirates. This is usually what the crux of the UBB argument comes down to. There’s a mistaken belief among UBB supporters that all the internet is good for is email, surfing the web and watching the occasional cat playing piano on YouTube, so 5 gigabytes a month or so should do it. Anyone who needs more is clearly a file-sharing pirate, so if the law can’t stop ‘em, maybe usage limits will - and should. That’s so wrong it’s not even funny.  There are no “heavy ” and “light” users, only early adopters and mainstream users. Yesterday’s Napster users are today’s iTunes customers, while yesterday’s peer-to-peer file-sharers are today’s Netflix subscribers. The proof is in the pudding: In a 2009 survey of Canadian internet users, Statscan found that 31% went online to download or watch television and movies, up from only 12% in 2005. More and more non-pirate Canadians are moving toward heavy-bandwidth services, such as online video, while more and more perfectly legal services that use lots of bandwidth are also coming online every day - things like internet radio, online video game service Steam, HD video-conferencing, and so on. This means more and more Canadians are becoming so-called “heavy users” every day. If UBB supporters want to punish these heavy users, they’re eventually going to punish themselves.

5. Pirates are not necessarily bad. Further to that, just as all virus creators and hackers are not necessarily evil because they do point out flaws in products, so too do illegal file-sharers actually perform a public service. The iTunes store would not have started if Napster’s success hadn’t concretely established public demand for online music. The same goes for Netflix and BitTorrent. File-sharers are often feathered and tarred for their questionably legal activities, which often result in heavy bandwidth consumption, but they do blaze economic and technological trails for new online business models.

4. Not all opponents of UBB are hogs. What bugged me most about the Maclean’s editorial was the claim that the government got involved because of “wild online outcries from the heaviest users and their internet service providers.” I’m not sure if I was included in that statement, but let me just say for the record: I’m a Rogers subscriber with a 60-gigabyte cap that I’ve never exceeded. I’m not what such people would consider a “heavy user,” even though I use Skype and play games on Xbox Live virtually daily, watch Netflix occasionally and generally rely on the internet for my livelihood. My concern, and I’m sure the concerns of many other such “non-hogs,” stems from the fact that if you limit internet usage in Canada then you limit the development and proliferation of new online business models. For months I’ve marveled at Netflix’s figurative balls of steel for entering Canada in the face of our small usage limits. But when the CEO publicly states that he’s wondering how they’re going to do here because of it, that’s not exactly a vote of confidence for other, similar services looking to start up here. In regards to video, services that millions of Canadians would love to have - such as Hulu - are already handcuffed by an extra layer of content licensing requirements from Canadian rights owners. This problem is now compounded by the perverse fact that those licensing roadblocks are now in the hands of the very same big ISPs that are trying to curtail internet usage (i.e. Shaw owns Global, Bell owns CTV). Through a series of well-orchestrated machinations, our big ISPs have made it virtually impossible for a service like Hulu to start up here without their involvement. UBB is just the icing on that cake.

3. Market forces won’t take care of problems. Part-time commentators on Canada’s telecommunications market like to pretend it is ultimately subject to Adam Smith’s “Invisible Hand” theory, where the nature of competition between companies will stamp out any issues that arise. If you’ve read just about anything I’ve written on this subject, you know that this is impossible in Canada because we do not have a proper, open market because of foreign ownership restrictions. Telecom is an expensive game to play and very few Canadian companies have the deep pockets to do it. The invisible hand cannot exist until ownership restrictions are done away with.

2. Facilities-based competition is not the holy grail. Lots of people, from the CRTC to media commentators, believe that so-called facilities-based competition - the cable company’s network versus the phone company’s network - is the way to go. An earlier Canadian Business editorial even suggested the entire open-access wholesale system we have, where smaller ISPs can use portions of incumbent networks, is completely stupid. Here’s the thing: both of these set-ups are yesterday’s models and they are both wrong in today’s world. Cable versus phone got Canada an early lead, but countries that adopted stronger open-access rules have over the past decade sprinted ahead as our facilities-based competitors stopped competing against each other. Now, as many countries are looking ahead to super-fast, next-generation fibre internet connections, a new trend is emerging: network-owning companies that are separate and independent of any access seller. The trend started in 2005 when BT created Openreach, a separate entity that owns the network and neutrally sells access to it to all comers. Australia and New Zealand have followed suit and several European countries are contemplating it too. Suggesting such an arrangement should be adopted in North America is akin to heresy, but it makes all kinds of sense. Heck, despite their public rhetoric, even the telecom companies themselves don’t actually think facilities-based competition makes logical sense any more. Why else would Bell and Telus jointly build their new wireless network?

1. Everyone else makes it work. I love pointing out how unlimited or practically unlimited internet usage is common in just about every other country because this disproves every argument there is in support of UBB. If ISPs in every OECD country except Canada, Australia and New Zealand can make it economical to give customers big or non-existent usage limits, why can’t we? (See OECD broadband portal, table 4g.) The price of bandwidth continues to fall globally, so those countries aren’t having conversations about whether the internet is like electricity or whether it’s fair to charge heavy users extra, they’re talking about how to make all of their citizens heavy users. The reason we’re not having that conversation is because all those other countries have something we don’t: competition and consumer choice between providers, which keeps prices reasonable and usage limits high.