Posts Tagged ‘ Apple ’

How Do You Define the Internet?

Thursday, November 11th, 2010
Richard Bennett



Richard Bennett is a research fellow at the Information Technology and Innovation Foundation, specializing in broadband networking and Internet policy. He has a 30-year background in network engineering and standards.

by Richard Bennett

One of the more interesting comments filed with the FCC in its recent Further Inquiry into Two Under-Developed Issues in the Open Internet Proceeding came from a group of illustrious computer industry stalwarts such as Apple hardware designer Steve Wozniak, computer spreadsheet pioneer Bob Frankston, Stupid Network advocate David Isenberg, and former protocol designer David Reed.

Their comments are worth noting not only because they come from such a diverse and accomplished group of people, but also because they’re extremely hard to follow (one of the signers told me he almost didn’t sign on because the statement was so unclear.) After reading the comments several times, asking the authors for clarification, comparing them to previous comments by a similar (but larger) group known as “It’s the Internet, Stupid,” and to an even older statement by a similar but larger group called the Dynamic Platform Standards Project (DPSP), I’m comfortable that I understand what they’re trying to say well enough to explain.

A Passion for Definition

The author of these three statements is Seth P. Johnson, a fellow from New York who describes himself as an “information quality expert” (I think that means he’s a database administrator, but it’s not clear.) Johnson jumped in the net neutrality fray in 2008 by writing a proposed law under the name of the DPSP and offering it to Congress.

The gist of the thing was to define Internet service in a particular way, and then to propose prosecution for any ISP that managed its network or its Internet connections in a way that deviated from the definition.  Essentially, Johnson sought authority from the IETF’s Internet Standards, but attempted to reduce the scope of the Internet Standards for purposes of his Act. The proposed Act required that ISPs make their routers “transmit packets to various other routers on a best efforts basis,” for example, which precludes the use of Internet Type of Service, Class of Service, and Quality of Service protocols.

IETF standards include a Type of Service (ToS) option for Internet Protocol (IP) as well as the protocols IntServ, DiffServ, and MPLS that provide mechanisms for network Quality of Service (QoS.) QoS is a technique that matches a network’s packet transport capabilities to the expressed needs of particular applications, ensuring that a diverse group of applications works as well as possible on a network of a given, finite capacity.  ToS is a similar method that communicates application requirements to one of the networks that carries IP datagrams, such as Ethernet or Wi-Fi. Packet-switched networks, from the ARPANET days to the present, have always included QoS and ToS mechanisms, which have been used in some instances and not in others. You’re more likely to see QoS employed on a wireless network than on a wireline network, and you’re also more likely to see QoS on a local network or at a network edge than in the Internet’s optical core; but the Internet’s optical core is an MPLS network that carries a variety of private network traffic at specified service levels, so there’s quite a bit of QoS engineering there too.

The purpose of defining the Internet as a QoS-free, “Best-Efforts” network was to prevent network operators from making deals with content providers that would significantly privilege some forms of sources of content over others. This approach originated right after Bill Smith, the former CTO of Bell South, speculated that ISPs might increase revenues by offering exceptional performance to select application providers for a fee. While the service that Smith proposed has a long history in Internet standards (RFC 2475, approved in 1998, discusses “service differentiation to accommodate    heterogeneous application requirements”), it’s not part of the conventional understanding of the way the Internet works.

Defining One Obscurity in Terms of Another

“Best-efforts” (BE) is a term of art in engineering, so defining the Internet in this way simply shifts the discussion from one obscurity to another. BE has at least three different meanings to engineers, and another one to policy experts. In the broadest sense, a BE network is defined not by what it does as much as by what it doesn’t do: a BE network makes no guarantee that any given unit of information (“packet” or “frame” ) transmitted across the network will arrive successfully. IP doesn’t provide a delivery guarantee, so the TCP code running in network endpoints such as the computer on your desk or the mobile phone in your hand has to take care of checking for lost packets and retransmitting when necessary. BE networks are appealing because they’re cheap to build, easy to maintain, and very flexible. Not all applications need for every packet to transmit successfully; a Skype packet that doesn’t arrive within 200 milliseconds can be dropped, for example. BE networks permit that sort of decision to be made by the application.  So one meaning of BE is “a network controlled by its endpoints.”

Another meaning of BE comes from the QoS literature, where it is typically one of many service options in a QoS system. In the Internet’s DiffServ standard and most other QoS systems, BE is the default or standard treatment of all packets, the one the network router employs unless told otherwise.

Yet another definition comes from the IEEE 802 standards, in which BE is the sixth of seven levels of service for Ethernet, better than Background and worse than all others; or the third of four levels for Wi-Fi, again better than Background. When policy people talk about BE, they tend to use it in the second of these senses, as “the standard treatment,” with the additional assumption that such treatment will be pretty darn good most of the time.

Johnson’s FCC filing insists that the Internet, properly defined, must be a best-efforts-only system; all other QoS levels should be considered “managed services” rather than “Internet.” The filing touts a number of social benefits that can come about from a BE-only Internet, such as “openness, free expression, competition, innovation and private investment” but doesn’t explain the connection.

Constraining Applications

One of the implications of this view is that both network operators and application developers must adapt to generic treatment and refrain from relying on differentiated services or offering differentiated services for sale as part of an Internet service.

Unfortunately, the advocates of this viewpoint don’t tell us why they believe that the Internet must refrain from offering packet transport and delivery services that are either better or worse than generic best-efforts, or why such services would harm “openness, free expression, competition, innovation and private investment” if they were provided end-to-end across the Internet as a whole, or where the authority comes from to support this definition. We’re supposed to simply trust them that this is the right way to do things, relying on their group authority as people who have been associated with the Internet in various capacities for a long time. This isn’t engineering, it’s religion.

There is nothing in the Internet design specifications (Internet RFCs) to suggest that providers of Internet services must confine themselves to BE-only, and there is nothing in the architecture the Internet to suggest that all packets must be treated the same. These issues have been covered time and again, and the FCC knows by now exactly where to look in the RFCs for the evidence that this view of the Internet is faulty. The Internet is not a packet delivery system, it’s a virtual network that only works because of the underlying physical networks that transport and deliver packets. This virtual network defines an interface between applications of various types and networks of various types, and as is the case in all abstract interfaces, it may provide least common factor services, highest common factor, or anything in between, all according to the needs of the people and organizations who pay for it, use it, and operate it. As Doc Searls said many years back, nobody owns the Internet, anyone can use it, and anyone can improve it. The capacity for constant improvement is the magic of the Internet.

Myth of the General Purpose Network

If we insist that the Internet must only provide applications with one service option, we doom application developers to innovate within narrow confines.  A generic Internet is effectively optimized for file-transfer oriented applications such as web browsing, email, and media streaming; it’s fundamentally hostile to real-time applications such as immersive video conferencing, telepresence, and gaming. Some of the best minds in the Internet engineering community have labored for past 20 years to devise systems that would allow real-time and file transfer applications to co-exist happily on a common infrastructure, and these efforts are perfectly consistent with the nature of the Internet properly understood.

The central myth underlying the view of the Johnson and his co-signers is the “general purpose network” formulation. This terminology is part of telecom law, where it refers to networks that can support a variety of uses. When adapted to engineering, it becomes part of an argument to the effect that best efforts is the “most general purpose” method of supporting diverse applications and therefore the “best way to run a network.” I think it’s wrong to frame the challenges and opportunities of network and internetwork engineering in this way. I’d rather that people think of the Internet as a “multi-purpose network” that can offer diverse packet transport services suitable for diverse applications.  We want network operators to build networks that serve all applications appropriately at a price that ordinary people can afford to pay. We don’t want consumers to pay higher prices for inefficient networks, and we don’t want to foreclose application innovation to the narrow bounds of legacy systems.

Segregated Systems are Harmful

Systems that allow applications to express their requirements to the network and for the network to provide applications with differentiated treatment and feedback about current conditions are apparently the best way to do this; that’s the general concept of Internet QoS. This has been the thinking of network and internetwork engineers since the 1970s, and the capability to build such systems is embedded in the Internet architecture. The technical people at the FCC who are reading the comments in this inquiry know this.

These arguments seem to endorse a disturbing trend that the so-called “public interest” advocates are now advancing, to the effect that advanced network services must be segregated from generic Internet service on separate (but equal?) physical or logical facilities. This is not good, because it robs us of the benefits of converged networks.  Rather than dividing a coax or fiber into two frequencies and using one for IPTV and the other for Generic Internetting, it’s better to build a fat pipe that provides IPTV and Generic Internetting access to the same pool of bandwidth. The notion of sharing a common pool of bandwidth among multiple users and applications was the thing that started us down the road of packet switching in the first place, and it’s very important to continue developing that notion; packet switching is the Internet’s enabler. Segregated facilities are undesirable.

Integrating Applications and Networks

What we need in the Internet space is a different kind of vertical integration than the kind that was traditional in the single application networks of the past. QoS, along with modular network and internetwork design, permits applications and end users to essentially assemble networks as applications are run that provide them with the level of service they need at the price they can afford. We get to that by allowing applications to explicitly state their requirements to the internetwork, and for the internetwork to respond with its capabilities. Application choice meets the needs of innovators better than by a rigid “one size fits all” formulation.

The Internet is, by design, a platform for both generic and differentiated services. That’s its true legacy and its promise. We don’t need to run into historical blind alleys of myth and prejudice when the opportunity faces us to build this platform out to the next level. As more Internet use shifts to mobile networks, it will become more critical than ever to offer reasonable specialization to applications in a standards-compliant manner. The Internet of the Future will be multipurpose, not generic.

Photo credit: Pixelsior

A Nation of Startups

Thursday, April 8th, 2010
Dane Stangler



Dane Stangler is research manager at the Kauffman Foundation.

by Dane Stangler

A distinct sense of unease permeates the traditional spirit of American optimism. The unemployment rate appears stuck at 9.7 percent, and many project that it will fall to around only eight percent by 2012 and to perhaps five percent by the middle of the decade. Disquiet over jobs is joined by a vague fear that the U.S. has lost its edge in innovation: our companies are losing ground to emerging market competitors and our students are falling behind their peers in other countries. In a recent post, Michael Mandel put these two concerns together, saying our jobs crisis is simultaneously an innovation crisis.

In response, a common impulse in Washington has been to call on the federal government to somehow solve both problems together, whether by creating “green” jobs, directing more money into research and development, or, most distressingly, provoking a trade war with China. Yet the real solution to both crises — the way to create more jobs and innovation — is right in front of us: startups. As New York Times columnist Thomas Friedman wrote recently: “Good-paying jobs don’t come from bailouts. They come from startups.”

Americans start new companies at one of the highest rates in the world, a pace that has been consistent for nearly 30 years. This steady stream of new companies was responsible for nearly all net job creation over that period of time, and many of those startups introduced new innovations into the economy, whether personal computers (Apple), productivity-enhancing software (Microsoft), 24-hour news (CNN), biotechnology (Genentech) or web browsers (Netscape).

The empirical evidence on the importance of startups is compelling, but not everyone is buying it. Responding to Friedman, for example, Dean Baker wrote:

Friedman’s conclusion about the special importance of new firms is utter nonsense. The claim that most net new jobs came from new firms conceals the fact that existing firms added tens of millions of jobs in this 25-year-period. Of course existing firms also lost tens of millions of jobs. We can say that the net job creation for existing firms was zero, but if we did not have an environment that was conducive for the job adders to grow (how many jobs did Microsoft, Apple, and Intel create after their first 5 years of existence?), then existing firms would have lost tens of millions more jobs.

There are basically two ways to look at job creation in the economy: gross and net. Large existing companies hire thousands of people each year, but they also see thousands of people leave. Gross job inflows and outflows in the American economy are enormous, an indicator of the ongoing reallocation of resources that drives economic growth. At the end of the day, however, if we want to keep pace with an expanding labor force (new entrants) and a changing economy (the rise and fall of sectors and companies), what matters is net job creation. It would be little consolation if we had 100 people looking for jobs, and large company ABC hired those 100 people but also fired 100 different people.

Many people prefer the (ostensible) comfort of big, established companies to the unpredictability of startups. Sure enough, while new companies create thousands of jobs each year, they also destroy thousands of jobs, whether through their effect on existing firms or through failure. (Roughly a third of new firms close in their first two years.) But these firms are important, too, in that they provide one of the few sources for big companies to draw on in adding jobs: in many cases a big company can only add net jobs by acquiring a new firm.

In addition to jobs, startups are an important source of innovation for the economy, responsible for a disproportionate share of breakthroughs. Big companies inevitably become locked into a cycle of quarterly earnings and long-term investments, leaving little room to pursue fringe ideas. Startups have the freedom to explore ideas at the frontier and succeed (or fail) in commercializing them.

This is not to say that large, established companies are unimportant. Far from it — the U.S. economy derives important strength from the symbiosis between startups and big firms. But if policy drifts too far in protecting big companies (whether through bailouts or certain types of regulation), it could suppress the number of startups. Just as importantly, should policymakers choose to focus on promoting entrepreneurship, it’s not clear that we can pick and choose certain sectors. The high-technology companies mentioned above garner much of the attention, but we see plenty of new firms emerge from seemingly mundane sectors such as retail and restaurants. We should reserve judgment on the types of startups we wish to see: every new company represents a source of renewal for the economy.

None of this means that startups represent the saving grace of the American economy; there is no silver bullet solution, to be sure. But, just as plainly, economic recovery will not happen without them. To begin creating our economic future, we need to start more new companies.

Photo credit: http://www.flickr.com/photos/philgyford/ / CC BY-NC-ND 2.0

Why the Jobs Crisis Is Actually an Innovation Crisis

Tuesday, March 9th, 2010
Michael Mandel



Michael Mandel is the chief economic strategist at the Progressive Policy Institute and the founder of Visible Economy LLC, a New York-based news and education company.

by Michael Mandel

Forget for the moment the $15 billion jobs bill moving through Congress — even its supporters admit that it’s far too paltry to make even a tiny dent in the unemployment rolls. And ignore the economic commentators who tell you that the labor market is recovering just because job loss has slowed.

No, the U.S. is having a genuine long-term jobs crisis, one which stems from a deeper problem: The Great Innovation Machine of the American economy seems to have broken down. With a few notable exceptions (think Apple and Google), this has been a period when companies have found it remarkably hard to turn promising breakthrough innovations into commercial breakthrough products. The list of “big-idea” innovations that seem tantalizingly close to market, but not quite there, just keeps getting longer and longer. Some examples: After 20 years of research, no human gene therapy has yet been approved for sale by the Food and Drug Administration; electricity generated from solar cells is still far from price-competitive with electricity from coal or natural gas; and biotech has not yet fulfilled its promise of speeding the discovery of new drugs.

The jobs crisis, in my view, is the direct result of the innovation shortfall. Since the 1990s, both Democrats and Republicans have expected the “jobs of the future” to come from the innovative, technologically advanced industries. Computers, semiconductors, internet companies, pharma, biotech, communications: all seemed to have enormous potential to create new jobs. What’s more, innovation seemed to be the only way that the U.S. could compete against low-cost producers abroad.

Many regions designed their economic development strategies around attracting biotech and infotech jobs to replace the “old-line” factory positions that had fled overseas (do a Google search for ‘biotech initiative’ and see how many hits you get). The desire to bring in pharma jobs is the reason why New London tore down homes and businesses to make room for a Pfizer research facility in 2001.

But the sad truth is that the innovative sector of the economy hasn’t generated many jobs recently. Let’s be very specific here. From the bottom of the job market in 2003 to the so-called peak in 2007, technologically advanced industries such as semiconductors, communications equipment manufacturing, and telecommunications lost thousands of jobs. Across the same period, the industry that the Bureau of Labor Statistics calls “Internet publishing and broadcasting and web search portals” — a catch-all category that includes Google, Yahoo! and all the high-profile Internet firms — added only 6,000 jobs.

Life sciences didn’t do much better. From 2003-2007, employment in pharma was stagnant, and biotech added only 16,000 jobs. Indeed, Pfizer recently pulled out of New London, leaving behind a lot of hard feelings. (For more on the jobs shortfall in the innovative sector, see my blog at www.southmountaineconomics.com.)

Turning Innovation into Jobs

So what has happened here? A big part of the jobs crisis stems from a simple fact: Commercializing innovation has taken a lot longer than people expected. Across multiple areas, from biotech to alternative energy to advanced materials to the private uses of space, both large and small companies have faced fundamental scientific and engineering problems. The best example is the sequencing of the human genome, which was announced to great fanfare in 2003. But turning that initial breakthrough into commercial products has turned out to be far more complicated and difficult than many thought. (For more on the innovation shortfall, see my June 2009 cover story, “The Failed Promise of Innovation in the U.S.,” for BusinessWeek.)

In today’s global economy, innovation makes up the main comparative advantage for the U.S. If we are not generating jobs in the innovative industries, it’s no surprise that we have a jobs crisis.

Addressing the innovation shortfall has to be a cooperative project between business and government. How? Here are three low-cost ways to foster a better climate for innovation and jobs:

  • Elevate innovation to the top of the policy agenda. President Obama needs to publicly give higher priority to innovation. In the latest Economic Report of the President, innovation is relegated to the very end of the report, and does not even get a whole chapter to itself (the chapter is called “Fostering Productivity Growth through Innovation and Trade”).

    Why is a public emphasis on innovation important? Government is much better at stopping breakthrough products and services than creating them. New ideas, by definition, are threatening to the status quo. That’s why the president has to give a clear signal to the entire government bureaucracy that innovation is important.

    On the one hand, this shift in public priorities can be done right now, without any additional funding, so Obama wouldn’t have to fight Congress. On the other hand, Obama might have a big struggle to get support from his own economic advisors, some of whom don’t seem to place such high value on innovation.

  • Broaden out government funding for R&D beyond healthcare. To maximize the chances for innovation-related job growth, we want a broad and diverse program of federal support. However, in recent years, federal funding for R&D has increasingly focused on healthcare. Obama’s proposed FY 2011 budget continues that trend, with federal spending on health R&D projected to exceed spending on nonhealth civilian R&D by more than 30 percent. The result: Other areas of R&D are being starved for funds.
  • Improve measurement of the innovative sectors of the economy. Innovation is not as tangible as, say, a new building or a new truck. We are great at counting construction and vehicle production, but horrible at keeping track of innovative activities.

    And as management consultants say, you get what you measure. For example, we know virtually nothing on business spending on R&D in the U.S. during the downturn — a key piece of information for understanding where the economy is going. The good news is that the Bureau of Economic Analysis and the National Science Foundation have made some progress in this direction. However, a relatively small amount of money could accelerate the upgrading of the statistics, with a big impact on policy.

These proposals will not guarantee that the U.S. will suddenly experience a surge of innovation-related job growth. There’s nothing that anyone can do to ensure that commercially viable innovation will arrive on a particular schedule. But to raise the odds of good jobs in the future, we need to make innovation a priority today.

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