Month: March 2006

innovative broadband project in India

All of the 21,000 villages in the Indian state of Andhra Pradesh will soon have 100 Mbps Internet service. The state government sought private-sector bids for the project, contributed about 14% of project equity, provided free right-of-way permissions, and signed on as an anchor customer (40,000 government buildings connected for a fixed annual fee). The total cost of the network: about US$90 million.

Connections within villages to residences and business are left to competing local cable companies. Such cable companies have brought cable TV to about 40% of residences in Andhra Pradesh. The state-wide network is required to make available at the village points-of-presence (POPs) wholesale video distribution, telephony, and internet services at agreed prices. This makes the business plan for village networks simple: bring the services available at the village POPs to individual customers for a mark-up. This seems like a practical implementation of decentralizing local connectivity while standardizing wide-area service distribution (pdf).

Competition among network service provides can have large costs (pdf) relative to the cost of the network infrastructure itself. Government initiatives that promote a good structure for competition can help to make broadband services widely accessible at low cost. The Andhra Pradesh Broadband Project promises to do just that. Other innovative broadband projects, such the Singapore National Broadband Network and municipal broadband projects, have different institutional structures. More comparative institutional analysis would be helpful for informing communications policy.

Randeep Sudan, now at the World Bank, helped put together the Andhra Pradesh Broadband Project. He described the project in a recent presentation at the FCC. With his permission, I have posted his slides here.

end your morning with citizen journalism

Democracy depends on an active, informed citizenry that is not continuously angry, frustrated, or depressed. Citizen journalism, open source journalism, grass-roots journalism, the fifth estate, pajamas media — whatever you want to call it — has many potential public benefits. Not often recognized, but most importantly, it is a vital defender of public good humor. Serve the public interest as a citizen journalist!

ARPUR: a business performance metric for presence in communication services

The largest share of value in communications services is the value of presence. How can communication services providers measure their performance in capturing this value?

Average Revenue Per User’s Relation (ARPUR) is a practical measure of presence value. ARPUR is Average Revenue Per User (ARPU) divided by some measure of user’s interaction with other users (relations). Such a measure might be the least number of users who account for in total at least 50% of the given user’s communication sessions, time, or revenue. The higher the ARPUR, the more the communication service is creating value through presence.

Persons typically value most highly the presence of family and friends. Limitations of time and attention, which good communication services can help to relax, constrain the number of family and friends that a person can sustain in daily interaction. The value of communication with the family and friends that persons do sustain is typically high and enduring. A good business plan for communication service providers is to capture a large share of this value. ARPUR is a metric of success in doing this.

While not often recognized as such, telephone service is a quintessential presence business. A study in the U.S. in the 1970s found that 50% of residential calls go to a set of five numbers. I think this has been roughly true for personal telephone service in most places throughout the history of telephone service. Creating more value in these relations creates value in this kind of communication service. It’s a presence business.

For contrast, consider an anti-presence communication service: telemarketing. Telemarketing involves mass distribution of information of interest only to a small number of persons. The telemarketer typically does not know any of the persons whom she contacts and does not typically repeatedly contact them. Moreover, most of her contacts probably wish that they did not know that she existed. A good communication service for telemarketing users might have a high ARPU. But its ARPUR would be near zero. It’s not a presence business.

ARPUR might help a new communication service provider steer its business between the imperatives of viral marketing and the long-term value of presence. Viral marketing, like infectious diseases, propagates most rapidly with some highly promiscuous agents. A communication service that wants to succeed virally needs to enable promiscuous agents. On the other hand, promiscuity is inconsistent with large presence value. The business challenge might be to manage change from low initial ARPUR to strongly rising ARPUR.

Suggested analytical exercise: Consider ARPUR for portraiture over the past 500 years. Take the user relation to be the gift of a picture of oneself to another person. What has been the trend in ARPUR? What has been the trend in total portraiture industry revenue? For relevant information on the economic history of the photography business, see Photographs and Telephone Calls in Sense in Communication.

Take-away message for busy communications executives: Get out of the telecom toilet and get your business purring. Stop sniffing ARPU and start making ARPUR!

YouTube and indecency

No nudity, no violence, no profanity — can you f@$%^&* believe this $#^+! YouTube has declared that the Galbi Brother’s Epic 800-Meter Challenge video “may contain content that is inappropriate for some users.” So they want all the sports fans to register before they watch the video (also available without registration here and here).

Indecency is a major communications policy issue. How this issue will play out for online video sharing isn’t clear. Don’t do evil is a good principle both for service providers and users (see truth #6, which extends to users having fun, too).

I sent YouTube a polite email requesting that YouTube reconsider the appropriateness of the Galbi Brothers’ Epic 800-meter Challenge video. That was on Friday, March 3. YouTube hasn’t yet responded to my email.

I think that respect for users implies that YouTube should have some fair process for reviewing “appropriateness” classifications. The same goes for copyright rule enforcement. This isn’t just good business practice — it’s also common decency.