An Open Letter to the Industry and Consumers

Today is a wake-up call to consumers and the payments industry. Restaurants across the nation make it very easy for anyone to use credit cards for payment. Seems like a great idea, but there is a serious security flaw that they have overlooked that places consumers in dire risk.

In less than 5 minutes, any unscrupulous waiter can "skim" – or steal – a consumer's financial and personal information right off the card. How do we know? We did it. We posed as a waiter in a local restaurant, and when it came time to pay the bill the customer used a credit card. After handing the card to our agent, they were able to walk away, copy down the card information, and return it to the customer without their knowledge.

Let me explain how easy it is to exploit the vulnerability.

A criminal gets a job at a restaurant. They can then illegally collect personal and financial data from the face of a payment card. It's shockingly simple.

The issue is that customers should be careful who they give their payment card to.

There are hundreds of thousands of these waiters floating out there and more are hired every day. And because anyone can get a job at a restaurant, anyone can masquerade as a legitimate waiter and swipe your payment card. Your card data is then instantly and illegally captured to a notepad, un-encrypted – and voila, you're a fraud victim.

Consumers who hand over their plastic to merchants are unwittingly putting themselves in danger.

Don't take our word for it. See for yourself by going to a restaurant, and watch as the waiter leaves your presence with your payment card.

Today we are handing a copy of our research over to Visa, MasterCard, Discover, American Express, and JP Morgan Chase, and we invite their comments.

Consumer trust is what's really at stake. If the industry allows restaurants and other similar attempts to short-circuit security best practices, it will seriously jeopardize the integrity and security of the payment infrastructure and financial systems developed over the last three decades.

Secure payment systems, like those provided by credible providers which adhere to the highest level of security practices, are critical in protecting consumers, merchants and banks. Without this protection, all commerce – conducted with plastic or mobile devices – is a catalyst for massive personal and institutional financial loss.

There is great promise in the future of mobile payments and our innovations will help drive the industry forward. It is our hope that both consumers and merchants will take it upon themselves to become educated on the security risks involved with some of these experimental payment acceptance methods, and make informed decisions to protect themselves and their customers.

We take security very seriously. Securing payment transactions is what we do, and yes – calling attention to and protecting against these types of security threats to consumers, merchants and banks is our responsibility.

We call on waiters to do the responsible thing and stop accepting payment cards in their establishments.

https://squareup.com/

http://www.sq-skim.com/

If you don't cannibalize your own products, someone else will

http://www.theinquirer.net/inquirer/opinion/1635335/why-apple-regret-ipad

You need to be the one cannibalizing your own products. Too many companies make the mistake of trying to protect their one great idea from anything that might threaten it. In doing so they prevent themselves from innovating.

Apple's Unsung Innovation - Micro-payments

Apple has done a lot of things right with the iPhone / iPad over the past 3 years. However one thing that I haven't heard a lot of talk about is the iTunes payment system.

It might be a stretch to call it an innovation on Apple's part, but Apple certainly seems to be the first to get it right.

The success of the App Store I think is very strong evidence that people will pay for things if:

1. They think it is a good product
2. It is reasonably priced
3. The purchase process is easy and fast
4. They trust the store with their payment info

I think the ability to get customers to actually part with their money has drawn a lot of developers to the App Store. Sure I can write a quick flash game and toss it up on a website, but how to I get paid? Adds seem to be the only thing going, but it doesn't seem like there's a lot of independent software developers making a living off web based apps. Sure the big players can make it work, but for a lone developer with an idea to earn a living on the web usually requires venture capital, and years of planning. There are plenty of people making a living selling software in the App Store now, and they don't have VC partners to pay back eventually.

I think this also serves as strong evidence refuting some industry perspectives (RIAA/MPAA/etc) who think that the world is full of thieves, and only laws and technology will save their dying business models.

Microsoft Kneecaps Current Windows Mobile Users

Business Insider has an interesting graph showing the decline of Microsoft in the U.S. share of the smartphone market. Its been brought up that raw sales numbers should also be looked at. However regardless of what numbers you use, the announcement of Windows Phone 7 Series this week will have the following effects:

1. Sales of existing Windows Mobile phones will plummet.

2. Developers of current Windows Mobile OS apps will halt development and redirect efforts.

3. All current Windows Mobile phone owners will begin looking for a new phone.

The assumption that Microsoft is banking on is that people in the #2 and #3 groups above will all flock to Phone 7. However if that doesn't exist for 6 months at least, there's a lot of time for those groups to be looking at competitors.

What will the iPad compete against?

It's interesting to compare the iPad to other devices it will be competing with:

Sources:

Sony DVD Player

Kindle DX

PSPgo

Nintendo DSi

JooJoo

Dell Mini

MacBook

iPad

Adobe should make tools to target HTML5

One thing Adobe could be doing – and I hope they are – is developing tools that target HTML5.

Adobe doesn't make money directly off of the Flash runtime (so far as I can tell). They make their money selling the development tools. I don't se any reason why Adobe couldn't re-target their development tools for HTML5 / Canvas / SVG etc.

HTML5 has a lot of capabilities, but developing for it is harder now than developing for Flash. Adobe seems able to create development tools that are approachable by a large audience, why not use this skill to target an open standard environment? They could still be first to market with a killer HTML5 development tool.

How Bad is the Web in Mobile Safari?

There's been a lot of complaining about how the new iPad doesn't support "the real web" because it doesn't support Flash. The implication is that Flash is so essential to the web, that not having it in the iPad makes the web browser useless.

There's a post at http://theflashblog.com/?p=1703 that attempts to drive this point home by showing some photoshop mockups of what they think web sites will look like on the iPad.

Rather than fake photoshop mockups, how do some of those sites look in mobile safari on the iPhone today?

Are there websites that don't work and are broken? Certainly. But implying that the lack of Flash makes sites like CNN, Disney, and Google Financials useless is just wrong.

[update]

Mark Damon Hughes has another good comparison of the sites demonstrated above.

iPhone Push services are the death of SMS

Today Apple invited iPhone developers to test out the new version of AOL Instant Messenger for the iPhone. The big different? Push notifications are now live.

It flat out works great.

Its now possible to send messages to iPhone users, and they will always get the notification, regardless of what apps they have open, or if the phone is in standby. Previously the only two things that would always notify the phone were actual phone calls and SMS messages.

This is the beginning of the end for SMS. The most over-priced 'feature' of phones is finally being attacked. Not by laws, not by outrage, but by innovation.

Thanks Apple!

App Stores are Hard

Walt Mossberg:

The Pre’s biggest disadvantage is its app store, the App Catalog. At launch, it has only about a dozen apps, compared with over 40,000 for the iPhone, and thousands each for the G1 and the modern BlackBerry models. Even worse, the Pre App Catalog isn’t finished. It’s immature, it’s labeled a beta, and Palm has yet to release the tools for making Pre apps available to more than a small group of developers.

In fact, during my testing, one of my downloads from the App Catalog caused my Pre to crash disastrously — all my email, contacts and other data were wiped out, and the phone was unable to connect to the Sprint network or Wi-Fi. Palm conceded the catastrophe was due to problems it still has getting the App Catalog to work with the phone’s internal memory, and explained that this is one reason it hasn’t widely distributed the developer tools.

Maybe this is why Apple released the App store a year after the iPhone had been on the market?

Apple does the right thing with MobleMe rocky rollout.

Today I got an email from Apple about the MobileMe transition from .Mac. Basically they agree that it was pretty messed up.

MobileMe Services are now available

We have recently completed the transition from .Mac to MobileMe. Unfortunately, it was a lot rockier than we had hoped.

Although core services such as Mail, iDisk, Sync, Back to My Mac, and Gallery went relatively smoothly, the new MobileMe web applications had lots of problems initially. Fortunately we have worked through those problems and the web apps are now up and running.

Another snag we have run into is our use of the word "push" in describing everything under the MobileMe umbrella. While all email, contact or calendar changes on the iPhone and the web apps are immediately synced to and from the MobileMe "cloud," changes made on a PC or Mac take up to 15 minutes to sync with the cloud and your other devices. So even though things are indeed instantly pushed to and from your iPhone and the web apps today, we are going to stop using the word "push" until it is near-instant on PCs and Macs, too.

We want to apologize to our loyal customers and express our appreciation for their patience by giving all current subscribers an automatic 30-day extension to their MobileMe subscription free of charge. Your extension will be reflected in your account settings within the next few weeks.

We hope you enjoy your new suite of web applications at me.com, in addition to keeping your iPhone and iPod touch wirelessly in sync with these new web applications and your Mac or PC.

Thank you,

The MobileMe Team

I think this is a pretty decent thing to do. 30 days free more than makes up for the 3-4 days of flakiness the past weekend.

It's also cool that they are owning up to the fact that 'push' doesn't work the way customers envisioned it on the desktop yet.

This seems like a potential new level of openness from Apple regarding problems, and I very much welcome it.

[ update ]

It looks like Apple has started an official MobileMe status blog: http://www.apple.com/mobileme/status/

How Many Times do I have to Buy This?

I have no problem compensating artists for their work.

How many times must I do it?

I have purchased Nine Inch Nail's Pretty Hate Machine album 3 times on CD, and once on iTunes. My first few CDs were lost or scratched, or in storage when I got my first iPod. What are the record companies selling? They keep saying they are selling licenses to listen to a song, but what they are trying to create is an infinite continuum of potential licenses, one for each format, device, thought, or dreamed up service, with them taking their 0.99, 1.99, 3.99 etc at each and every opportunity.

I love Nine Inch Nails. Trent has, I believe, received enough money from me in the past to allow me to continue to enjoy Pretty Hate Machine now, and in the future. Regardless of what new formats or paradigms arise.

Middlemen

They've been around for a long time now.  They're around in almost every market segment, taking their slice of transactions.  Lawyers are the middlemen between to parties in a legal dispute.  Grocery stores are the middlemen between farms and consumers.  Up until now, record labels have been the middlemen between musical artists and their fans.

Bringing two people together to do business has always been a hard thing to do.  Direct contact between buyer and seller is almost always the best, but sometimes its just really hard to connect.  Enter the middleman (or middlewoman).  New middlemen are popping up all over the internet.  Social networking sites are the middlemen between people trying to connect.  Sites like Digg and Technorati are the middlemen between Bloggers and readers. Google is now the middleman between just about everything (content) and everyone (searchers).

Which brings be back to the record labels.  It used to be if you wanted to make music and get it into the hands of your fans, you pretty much had to go through a record label.  What did the record label really do for you though?  For the most part, they did some advertising, and they got your Vinyl / 8-track / Tape / CD from you to record stores, and then into the hands of your fans.  

With the costs of producing music plummeting, and the ability to do your own advertising and distribution, where's the value from the record labels anymore?

Death of a Record Label

I predict that within 50 years, maybe less, the record labels will look nothing like they do today.  Oh they'll probably manage to hang around, but instead of the media titans they are today, they will be relegated to online bit bucket hosting and credit card processing.  That's really the only thing that's a little bit hard to do still.  The real power will be in the internet's new middlemen.  Google, iTunes, Amazon, these are the places where fans go to look for music these days.  What music fan goes to Universal's website to look for new music?  Bands in the future will simply check the 'music host' option from their local internet service provider, register with iTunes, and then do some advertising and play shows.

Will this mean the end of music superstars?  Probably not.  I think it just means that hype will die down, and only the bands with true talent will last long enough to get their music into enough fans hands to be called superstars.

Will there be more bad music out there?  Probably.  However social networks, peer ratings and the collective audience will quickly sort the good from the bad and allow you to find good music that you like.  Sites like Last.fm are doing this now.

So there's my prediction.  I'll check back in 50 years and see how I did.

NBC To offer video download service

The New York Times is running a story about NBC offering their own video download service this fall. So it looks like NBC is wanting to get in on the download action directly. At least they're not trying to hide their reasons for it.

“We did this to eliminate the middleman,” said Jeff Gaspin, the president of NBC’s digital division.

NBC seems to be waking up to the fact that the business they are in is media distribution, and that the distribution model has shifted online. Apple saw this much earlier and jumped on it. Now that the model has proven successful, NBC is looking to go it alone.

It will be interesting to see how this plays out. Initially NBC says they will offer shows free for download just after they air. It looks like you only have one week from the air date to download and watch it however, and then it seems they won't let that episode be downloaded. The downloads themselves will be restricted to Windows-based PCs, and will stop working after seven days. It's unclear if that's seven days from the day it is downloaded, or seven days from the initial making available after the air time. This sounds like it makes it impossible to pick up a new show mid-season, then go to NBC and back sample the earlier episodes. If you really like a new show you'll have to hope for re-runs, or buy the DVDs at the end of the season.

It doesn't sound like the free part will last long however. From the NYT article:

But NBC intends to transform the service into a model similar to iTunes by the middle of 2008 - that is, consumers will pay NBC directly to download episodes of the shows.

I will have to reserve judgement on the pricing until it is announced, but I'm not optimistic. One of the rumored reasons for the NBC-iTunes breakup was pricing, that NBC wanted to charge more. I can't really see how NBC expects to charge more that Apple's $1.99 per show, especially if the shows are really only rented for a week.

I will have to test this out on a Windows machine at work, since I don't have one at home. I'll be curious to see if NBC can put together an offering that is as easy to use as iTunes. I'm a little worried about the implications for 'TV Video' downloads if NBCs model proves effective. It seems each of the old guard Networks would likely follow suit with their own video download services.

Apple got out in front of all the old guard media companies, and quickly became the new network, the new aggregator. As a customer, I don't really care about NBC, or Apple. What I care about is a simple, direct path from the content creators to me. If NBC can pull this off, and I can still watch Battlestar Galactica on my schedule instead of theirs, more power to them.

iPhone Price Drop - Go For Market Share

A lot has been said about the recent iPhone price drop. Fairness aside, I think that the price drop is signaling a shift in Apple's overall strategy that's been happening slowly ever since the first iPod was introduced.

Apple is going for market share.

The 90s were plagued by Apple executives creating niche products and being happy with their great profit margins. However the iPod success has given Apple a taste of what its like to be the market leader. Apple sees another opportunity to become a market leader in the phone space, and they know they have to compete on price. Sure they could have held the price of the iPhone high through Christmas, and probably would have ended up making more money, but selling fewer phones. The price drop indicated Apple's desire to sell more phones, not necessarily to make more money. Apple is learning from watching other companies dominate in other markets. Step 1, become the de-facto standard, worry about profits later.

Apple has a long, long way to go to become that standard, but they have a shot at least. Nokia, Motorolla, Microsoft, Blackberry, Palm, etc all have a piece of the pie right now, but it would be hard to argue that any one has become a standard in the way that the iPod has. I don't know if Apple will succeed in this market, but the price drop indicates that they are going to make a serious push to dominate it.

Music vs. Motion :: Rent vs. Own

(reprinted from my other blog - Nov 2006)

Much has been said on the different models for the various online music stores. Here is my personal take.

Music and video are two very different mediums. Music occupies one sense: sound. Perhaps you could say it occupies touch also if you turn the music up loud enough, but sound is the primary sense. Video occupies two senses: sight and sound. As a result, there are certain activities where you can listen to music, or watch video at the same time, activities that occupy different senses.

Lets take music first. Since it occupies only one sense, sound, we are free to use our other senses for other activities. We can look at things. We can move around. We can't really listen to music and talk on the phone however, those activities overlap senses.

Video is more complex. It occupies two senses, sight and sound. We can't really look around too much, or we miss the video. Moving around is also awkward since we must split our attention between the video and not bumping into things. Running on a treadmil is ok, since we're not really in danger of running into things.

If we look at the activities when one listens to music, we find that in the majority of them, the music is secondary in nature. Riding a bicycle, or driving an automobile; music is there, but it is a background activity. Our primary focus is on a different task. Video on the other hand is usually the primary task. We sit down to watch television, we go to a theater to watch movies. We generally don't do much else while watching the video. Perhaps we eat or drink, but these are momentary, fleeting activities, and still secondary in nature. Exercise might be one of the few activities that could be considered primary while watching video might be secondary.

The frequency of consumption of these two media types takes different forms. Most music, with the exception of classical, tends to be fairly short. Even classical compositions rarely reach the length of a television show or movie. These smaller chunks are more easily consumed, and on a more frequent basis. We can listen to the same song three to five times a week, and not think much of it. Most of us probably enjoy it. However we probably will not watch the same movie that often, much less a television episode, or even a music video.

Since the associated activities, and consumption frequency of these two media types are so different, might our ownership and sales models also be different? Consider the successful iTunes Music Store. Their model for media sales is ownership. We pay Apple a one time fixed cost, and the media is given to us and we own it. (Well we own a license to use the media, but it's a very long term license) We can listen to a song as many times as we want, and we never have to give Apple another cent. Now consider other online media stores. Napster, Rhapsody, and others heavily favor a subscription model. We pay them a monthly fee, and can listen to as much music as we want each month. If we stop paying, we can no longer listen to any of their music.

Now for me.

I like owning music. It takes a lot for me to add a new song or new artist to my library. I listen to my music a lot. At home playing games, on my bicycle, in my car, at work, etc. I probably loop through my music library once ever week and a half or so. The songs that are in my main playlist however I really like, and I want to have them come up in rotation every few days.

Video is another matter. I perhaps own 20-30 movies on DVD. The last time I watched one of them was 2 months ago (Star Trek II: The Wrath of Kahn). I watch a fair amount of television. I got really into Farscape and Angel, and bought a few seasons of them on DVD. I watched each episode once and haven't played them again. I'm currently recording the new episodes of Battlestar Galactica. Since I'm not usually at home in front of my television Friday nights at 10pm, I record the episodes on TiVo, and watch them when I get time. Then I delete them. I enjoy the story, but I don't think I'll ever be really dying to go back and watch them again. Before I got a TiVo, I did buy a few episodes of Battlestar Galactica off iTunes. Again I watched them once and haven't looked at them since.

I want to buy music. I want to rent video. They are different media, offer different experiences, last different lengths of time, and occupy different parts of my senses. Why should we think they should be treated the same?

Response to Cory Shields

I just sent Cory Shields the following email in response to his recent statement.

From: Mark Fischer
Subject: Source for estimated piracy levels on iPods
Date: September 1, 2007 9:30:12 PM MST
To: cory.shields@nbcuni.com

Dear Mr. Shields,

I am greatly interested in the source for your comment recently:

"In addition, we asked Apple to take concrete steps to protect content from piracy, since it is estimated that the typical iPod contains a significant amount of illegally downloaded material."

I would very much like to investigate the piracy levels on portable music and video devices, but have been unable to find a relevant study. If you have access to, or know of such a study that was the basis for your statement, I would be grateful if you would let me know.

Sincerely,
Mark Fischer

NBC To Pull Shows from iTunes

I'm sad today, because I just found out that come December, I won't be able to watch Battlestar Galactica anymore. Oh NBC will still be airing new episodes, and it will be available on SciFi, but NBC announced today that they will be pulling their content from iTunes.

See here's my problem. I'm a new father. I work full time. This leaves me precious little time to spend on entertainment. That time doesn't necessarily fall Friday nights at 10:00pm. I know, I should just get digital cable and a TiVo. However a digital cable runs me about $50 / month, and a minimum 1yr TiVo contract is another $300. That's $900 / year (plus taxes, fees, media access charges, etc) to watch what, maybe 24 episodes? That's about $37 per episode. I can wait until the season is over and buy the episodes on DVD, but that's a long time to wait.

No offense, but I preferred the $2 I paid to get each episode off iTunes the day after it aired. (Even cheaper if you get a season pass).

Media companies are facing a hard future. And they seem to be ignoring basic economics.

Demand is Dropping
I have limited time and dollars to spend on entertainment. Frankly, there's just a lot more compelling entertainment options out there today than a decade ago. In the olden days before the internet, you had basically Television, Movies, Books Music, and the Arts. Today you have YouTube, World of Warcraft, Facebook, Xbox, PS3s, Wiis, the list goes on. The overall supply of entertainment is increasing, and as a result, demand for any one of the options will be diluted.

Faced with falling demand, the large media companies are desperately trying to cling to their old profit margins the only way they know how, try and wring every last dime out of anyone they can. Yet this is exactly the wrong thing to do, as any first year Economics student will tell you. If you have infinite supply, and you want to raise demand, you lower prices.

I like Battelstar Galactica, but after the birth of our first child, I canceled our cable subscription. I just don't have the time to sit down and watch television anymore. Somehow I don't think I'm alone in this decision. The shows I really do enjoy, I try and buy off iTunes and watch them here and there as I find time. I'll be sad if I can no longer watch these shows because large media companies feel I'm not giving them enough money. It looks like instead of getting $2 per episode out of me, they'll be getting zero. Oh well, I have a lot of good books to catch up on.

[Update]
It looks like Apple decided to just cancel NBC's contract now, rather than leave consumers with only half a season. Just another example of Apple looking at things from a constomer perspective. Wouldn't it be great if more companies did that?

Apple's Press Release on the topic.

Adobe vs. the printshops

&Adobe has been taking a lot of flak over the past few weeks for it's decision to include a 'Send to FedEx Kinkos' button on its 8.1 update for Adobe Reader / Acrobat Pro.  Well on August 1st Adobe apparently blinked and agreed to remove the link in an upcoming release: 

Adobe originally announced the FedEx Kinko's features on June 6, 2007 and decided to remove them from Adobe Reader and Acrobat following a meeting and getting feedback from print service providers. Moving forward Adobe is setting up a Print Advisory Council to investigate how best to integrate third party print services into Adobe products, as more partners invest in online print infrastructures.

Adobe's solution, to remove the button and let Kinko's distribute a special version with the button in it partly solves the problem.  I think a better solution would have been to develop a framework for letting the small printers get in on the built in action.  Imagine a 'find local printers' option in Acrobat, type in your zip code, and see a list of participating printers in your area.  Adobe could provide a server framework for receiving print jobs, and each local printer would have the option of either managing their own server for receiving jobs, or work with Adobe and use Adobe's servers.

It wouldn't be easy. It would be a lot of work on Adobe's part, as well as for the local printer.  Making sure the local printer has the capabilities to handle the submitted job would be difficult, but there are a lot of smart people at Adobe.  I think this approach would be a better balance between Adobe's two customer bases than their current solution of removing the button all together.  Granted, Kinko's will now be distributing their own version of Reader, but that ends up being less convenient for the content producers, who would have to download a special version, rather than the one they get from Adobe.

The print shop industry needs to start thinking differently about the marketplace as we move into an ever more networked world.  The print industry needs to take a lesson from the music industry.  Fighting technology and making life more difficult for your customers is not a winning strategy in the long run.  

Change is difficult, but rather than kicking and screaming about how Adobe hates the little guy, they should be looking at 'how can I get in on this so I can make things easier for my customers too?'

Network Neutrality vs Getting What You Pay For

There is a lot of talk these days about Network Neutrality, and all sides of the debate use the term to mean different things. Ars Technica has a great article about Network Neutrality and Deep Packet Inspection, and it has me wondering the same thing I've been wondering each time I hear Network Neutrality brought up.

It seems to me we have three primary players.  One is me, the end user.  Two is the other end of the 'tube', lets pick on Google since they're big and have more money than they probably need.  Three is the network owner, I'll pick on AT&T for this example.

AT&T is in the business of selling bandwidth on this big 'ol network that it owns, or leases, or cobbles together from a bunch of OTHER people who own networks etc, but for my example, I'll deal with the simplified AT&T.  So AT&T owns a network with a certain maximum bandwidth, and it makes money by selling people small slices of bandwidth on its network.  Google is a huge company that is ravenous for bandwidth, and it buys a huge chunk of it from AT&T.  I'm a little guy on an iMac in my living room, and I pay AT&T for a really tiny slice of bandwidth.

Once AT&T sells the bandwidth, why should it care if I talk to Google?  If I hit my bandwidth cap, I get throttled.  I paid for 5Mb lets say, and when I hit 5 that's it.  If I keep requesting more and more connections, either my new connections get refused, or my old connections get throttled back to make space in my little 5Mb slice for the new connections.

Google should be the same way.  Now Google's numbers are huge compared to me, and if too many of Google's connections are being throttled because Google hasn't bought enough bandwidth, then Google's customers might start to get upset with bad performance, and Google will be forced to either buy more bandwidth or deal with unhappy customers.

However, lets say that Google has purchased plenty of bandwidth, and in fact is doing a great job of serving its customers, so much so that Google is making money hand over fist.  I have heard the argument made that 'Google is getting rich on the backs of the networks', AT&T in my example.  Should AT&T be allowed a cyberspace version of a stage coach hold up?   Pay us a percentage of your ungodly profits or we'll throttle your bandwidth?  Google has paid AT&T for a certain bandwidth slice, as long as they don't exceed that limit, why should AT&T have any expectation of getting money out of Google?  Is it just that Google is better at making money with a given allotment of bandwidth than say Yahoo?  Isn't that like saying FedEx is better at making money on highways than UPS, so we should charge FedEx more to use the roads?

In my simple mind, packets are packets.  If I have an agreement with AT&T that they will deliver to and from me a certain rate of packets, then they better live up to their end of the bargain, or we'll be talking to the BBB.  Now if AT&T has oversold their available bandwidth, and too many people are actually using what they agreed to such that AT&T actually CAN'T provide each user with the bandwidth they agreed to, well that's a problem AT&T needs to deal with by either increasing its maximum bandwidth, or by not overselling what they can actually provide as much.  Similarly, if I've paid for a 5Mb connection, I better not get upset when I can't download 10 iTunes movies at the same time, each at 5Mb.  I can buy more bandwidth if I want to.

I know the real situation is much more complex than this, however this seems to be the fundamental question.  People are afraid of AT&T making deals with Yahoo to give Yahoo traffic priority, presumably at the expense of traffic from people who have not signed up special deals.  As long as that doesn't mean depriving Google of the bandwidth that Google has paid for and AT&T has agreed to provide, then I don't see the harm.  Yahoo is getting more and paying more, they're getting what they paid for.  The moment AT&T denies Google the bandwidth they have agreed on, AT&T needs to be taken to court for breach of contract.

I've never known anyone to complain about getting more than what they've paid for.  But I certainly know that customers will not stand by long and put up with not getting what they've paid for.

Where this came from.

Occasionally I come across articles on the web that make me scratch my head and wonder. Frequently these lead to private musings on my part about the subject. Infrequently, these musings bug me enough that I post a comment on the site if I can.

Occasionally this scenario occurs with a site that does not provide comments. Such a thing happened early in July with John Gruber's site, Daring Fireball ("One word: Newton" argh! what the heck?). Joel Spolsky recently provided a great summary of why comments can be quite a bad thing. Based on that logic I completely understand Mr. Gruber's decision to not enable comments on his site.

That doesn't help me any my musings unfortunately. I'm one of those people who tend to regurgitate ideas and chew them over and over again until I get them out and do something about it. So this shall be my place to get these nagging thoughts out of my head and written down. If Mr. Gruber ever stumbles upon this site and answers my question about just what the heck he meant back in July, then heck, I will be really happy. If that never happens, at least that thought is now written down here, instead of continuing to clang around in my head.