Conference co-hosts Walt Mossberg (left) and Kara Swisher interview FCC Chairman Kevin Martin and Verizon Wireless CEO Lowell McAdam.
(Credit: Ina Fried / CNET News.com)CARLSBAD, Calif.--The D6 conference wrapped up on Thursday with a session on broadband access: Walt Mossberg and Kara Swisher interviewed Lowell McAdam, CEO of Verizon Wireless, and Kevin Martin, chairman of the FCC.
Mossberg started by putting a chart up showing how far behind the U.S. is in broadband access, and how expensive our access is. Martin said you need to look at the unique demographics of the U.S., and if you compare some states, like Massachusetts, to Korea, then they'll hold up better. Of course, providing access to less-advantaged areas is still a challenge.
So why do we pay four times as much per megabit, Mossberg asks? Again, Martin says, it's because of demographics: The average cost considers rural areas, which are more expensive to serve. On the issue of providing service to more communities, Martin wants to get away from providing subsidies to multiple carriers in rural regions, although he recognizes that limited subsidies will lead to the "carrier of last resort" being the provider in each community.
Open access
Mossberg asked about spectrum auctions and the open access provision that go with that spectrum. Will we have an open system?
Martin: "I think it's important. I've heard that from consumers and entrepreneurs. So in the most recent auction we did, we proposed that whoever wins this spectrum has to be willing to be more open." He said, "We're not completely there yet, but every carrier is embracing and talking about how they are going to be more open." He listed T-Mobile, Sprint, Google, and Clearwire as participants in this movement. And, of course, he was sitting onstage next to Verizon Wireless' CEO, which has also announced open access to its network.
"Would you have done this without Google?" Swisher asked Verizon's McAdam, referring to Google's push for open wireless access. "Yes, we launched this before Google. We've seen what open networks can do. We don't ever want to be in the business of excluding business."
Regarding the new "open Verizon" network that's been announced, McAdam said access to it will be at the same rates as it is for Verizon's own hardware, although some value-add services that Verizon handset customers get may not be available, at least not for free, for the non-Verizon customers.
McAdam said he's aiming for service penetration beyond the current 80 percent or so that Verizon Wireless enjoys. He's looking for growth up to "500 percent penetration." How is that possible? By counting access to multiple Verizon services available to each customer, perhaps home network access and other services.
Terminate!
"Let's talk about termination fees," Mossberg said, bringing up a pet bugaboo of his. "How do you justify charging people hundreds of dollars two years after they've bought a phone?"
"We don't do that now," McAdam said. It's been about a year since the charges have been adopted. It costs about $200 to subsidize a smartphone, he said, but "we're going to tier that down...pro-rate it over time, so it makes it easier for the customer to leave if they want."
"If they wanted to pass a law that said no more subsidies, I'd eliminate it tomorrow. None of us (the carriers) would complain."
Martin agreed that termination fees "need to decline over time," and that new customers should have a period of time for a new phone--"14 days or so, after your first bill"--during which they should be able to cancel with no nuisance fee. There are class action lawsuits already under way, he said, which are blocking the FCC from working on this issue proactively.
"This practice is now going on in other industries," he said, and implied that he would like to halt the spread of it.
Access and speed
Martin said that many of the same debates that we have on wireless networks apply to other networks. Access providers cannot limit access to content, he said, but "network management" applications can be appropriate. "I think the commission needs to address that in a constructive way, to reinforce that the consumers have unfettered access to the network without the operator getting in the way."
Mossberg repeated to McAdams an AT&T claim that it can double their wireless access speed this year, triple it next. "And you guys are stuck," Mossberg said. "Is your technology limiting you?"
"There are no miracle technologies. You have to work through it. There's a difference between peak speeds and average throughput in the field. There's a difference in how much spectrum you want to dedicate to it. And the third factor is devices. In the next three or four years, that's a series of interesting financial decisions."
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The following is live coverage from D6 of Facebook's Mark Zuckerberg and Sheryl Sandberg being interviewed Wednesday by Kara Swisher:
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Nathan Myhrvold was chief technology officer of Microsoft, but since 2000 has been building a portfolio of inventions (patents) at Intellectual Ventures. He's also a talented chef, photographer, and paleontologist. He was interviewed Wednesday at D6 by Walt Mossberg.
Walt Mossberg interviews Nathan Myhrvold at the D6 conference.
(Credit: Ina Fried / CNET)Mossberg dived into the controversy around Myhrvold's venture, which has been called an institutionalized "patent troll." Myhrvold says, "We invest in ideas, not the realization of it." He says, "We recruit inventors before they have an invention."
"And then you own it?" Mossberg asks. "Yes, but we pay the inventor."
The company, started in 2003, works on a process that takes four to five years before it has ideas that can be protected. "A lot of (the ideas) are 10 years out." The company files 500 patents a year, and has filed 1,700 in total. Only about 50 have been granted so far, he said, but as of yet none of the patents is realized in products.
Example projects include a "new kind of nuclear reactor." Myhrvold says, "We need an affordable source of carbon-free energy," and, "Maybe this is the first time that a little company could rethink nuclear power. Dramatically."
How does it work? Myhrvold believes his company's technology can run without operators, with spent fuel from current reactors and depleted uranium. "We have a wonderful containment vessel already: a Dell blade server. You really want to simulate the hell out of this stuff first."
"We're swinging for the fences," he said.
There's another part of the business, similar to the private equity model. "There are lots of inventions that people have that the owner doesn't know what the hell to do with."
It's buying patents, Mossberg said. Myhrvold agreed, but of course disputed the "patent troll" appellation. "I challenge the notion that there's something wrong with having an investable asset," he said. "We're closing the loop of capital."
Mossberg pressed Myhrvold on the issue, trying to get Myhrvold to admit that his company is happy to litigate for patent damages. Myhrvold: "There's nothing wrong with trying to get a reasonable return" on patents. Yet, he says, there are many ways to monetize patents. "We've never sent a litigation notice to anyone, and we've never filed a suit." He did not rule out the possibility in the future, however.
"Thomas Edison's business model was very similar to ours," he said. What's different, he said, is that he thinks there's a new model, called "invention capital," that's similar to venture capital in that "you create an algorithmic way that people can get funded."
See also: Myhrvold on Microhoo and his new cookbook
Click here for full coverage of the D: All Things Digital conference.
The following is live coverage from D6 of Yahoo's Jerry Yang and Susan Decker being interviewed Wednesday by Walt Mossberg:
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Walt Mossberg (left) interviews Sony CEO Howard Stringer (right) at the D: All Things Digital conference Wednesday.
(Credit: Dan Farber/CNET News.com)CARLSBAD, Calif.--Sony CEO Howard Stringer says the culture of profitability has returned to his company. But, he says, it still has work to do.
In an interview with Stringer at the D6 technology and media conference, The Wall Street Journal's Walt Mossberg started by pointing out the failures of Sony's digital music player and interactive TV ventures. Stringer said that Sony is now running about 5 percent profit margins. Those margins need to get bigger to sustain the company, or, he says, "If we have any more success, we'll be bankrupt."
Speaking about the culture of the Japanese business he runs, he said it's difficult to adapt quickly--there's no laying off of white-collar workers or engineers. Hence, perhaps, his "get mad" rant last week. Stringer also delved into what's in Sony's future--from OLED TVs to game consoles and "craplets."
What's after LCD TVs?
LCD growth is beyond expectations, Stringer said, but OLED technology, while still too expensive, is the next thing. Or the current thing, if you want to spend $2,500 for an 11-inch screen. Its contrast ratio is a million to one, he said, a hundred times brighter than an LCD screen.
In a bit of D6 showmanship, Stringer showed a new version of the screen that's only 0.3 millimeters thick, and that could be formed in curves "wrapped around your arm," he said. A 27-inch version will be out soon. "It will be quite expensive. The only people who could buy them will be in this room."
The technology will eventually supplant LCD, Stringer believes, although at the moment he calls it "a perfect television companion."
It appears that Sony is pushing this technology in part because it's actually manufacturing these panels, unlike many Sony-branded LCDs, which it sources from other vendors.
Game consoles and Blu-ray
The expense of the PlayStation 3 at first led to a "mildly catastrophic" profitability curve, Stringer said, but the prices are coming down and the game titles are generating profits. He said the next game coming out, in June, will use the "full capacity" of the console and will be "spectacular."
The console is beginning to become a platform for more than just games--a hub for the PSP, for example. The PlayStation Network was key to Sony winning the Blu-ray/HD-DVD battle, Stringer said, since the PS3 was a great movie-playing platform.
In standard Blu-ray players, Sony did lose money on the players as the company had to chase the HD-DVD player market and its $99 retail prices. But the studios supported the Blu-ray format, which made the bigger difference.
Mossberg asks how many years of value Sony will be able to eke from that victory, especially as the move is to digital distribution. "There's a long lead time," Stringer said, "before you get the quality, you get on Blu-ray." He thinks the media format will last for 10 years or beyond, especially as people migrate to better and better television screens.
"Had I lost that war," Stringer said, "the headline would have been, not that HD-DVD won, but that it was Betamax 2. That would have been on my tombstone."
Movies and theaters
"It's a battle of pocketbooks and reality," Stringer said. "4K" digital projects are a better experience and will keep the theater experience unique. It's "transformational," he said. However, the economics of the movie experience, from cameras to projectors, will take time to rebuild.
Children drive the movie economy, especially in summer. "Whether the baby boomers will continue to go the theaters is a bigger issue," Stringer said.
Personal computers
"We had our best year ever last year. We had a 7 percent margin, our best ever." Mossberg asked about market share, though. It's because, "ours is the most expensive," Stringer replied.
"Our engineers like being on the cutting edge," he said. And "we have signs of life all over the place."
Mossberg gave Stringer a hard time about Sony PCs' pre-loaded software, or "craplets." Other vendors are removing the pre-loads, Mossberg said. "Are you willing to get rid of these craplets?"
Stringer: "No, I have to examine the joy of craplets. And you're not a typical consumer." But, he said, "I promise you a craplets review."
Re: iPod
"We've sold about 170 million music-enabled phones--about 75 million to 80 million are Walkman phones." Which is more than iPods, he said. Stringer said that Sony's Walkman phones revitalized the brand, and drove the success of the Sony-Ericsson phone lines.
And, Stringer said, we're doing more download relationships, like one we're announcing today with Usher.
The Sony music player, which had been overshadowed by the iPod, is "back in the game. We keep trying."
Mossberg asks: Will phones kill the dedicated portable media player? Stringer: "Steve [Jobs] keeps up, but there's room for two devices."
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In an interview with Walt Mossberg at D6, Amazon CEO Jeff Bezos said, "We are working on a new version of video on demand, a for pay streaming service we will release in the next couple of weeks. The streaming service will start instantly and it's a la carte, for pay."
This will be in addition to Amazon's download-to-Tivo service.
Developing...
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We'll be covering the highlights of the D6 conference today and tomorrow, but we're devoting special live blog coverage to two key interviews:
- At 1:45 p.m. Pacific Time, Jerry Yang and Susan Decker of Yahoo
- At 5:00 p.m., Mark Zuckerberg and Sheryl Sandberg of Facebook.
If you'd like to sign up for reminders, use the forms below.
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During the joint Gates/Ballmer opening interview at the D6 conference on Tuesday (all stories), the audience was treated to an early look at Windows 7, which, according to Ballmer, will ship to customers in late 2009. The demo showed a full-screen multitouch interface embedded in the operating system. We saw a demo of a Surface-like app for organizing photos, and what appeared to be the Windows 1.0 Paint app, except that you can now draw with all your fingers at once. Also, a digital globe app, where the two-handed interface makes good sense. And a piano app, on which, thanks to multitouch, you can now play chords.
Aside from a glimpse at a touch-enabled Windows task bar, that was it. The interface. The coat of paint on top of the multitasking engine, the file system, the security, the device drivers...the foundation that the UI is built on top of.
After the demo, I ran in to Bill Gates and asked him why he showed just the UI and didn't discuss the underpinnings. His explanation: "It's hard to show more in only five minutes...the security, the speed..." Then he took his plate of shrimp and left. And Ballmer had said, earlier in the evening, that the biggest pushback Microsoft got on Vista from customers was not around its security systems or its drivers, but rather on its interface.
But I really want to believe that customers--or failing that, at least the techie D6 audience--is able to see beyond the surface. There are so many more important things to worry about, both for users and for Microsoft. Cloud computing is obviating the need for much of what the OS does, yet users want to maintain control and ownership of their personal data. Network-delivered user interfaces can do a lot of what the desktop UI has traditionally done, but only when the user is online. I was really hoping for Ballmer and Gates to address the changing nature of computing, and not fight Apple for the design award; I really don't think the Microsoft UI juggernaut committee is going to be able to outflank the Apple design team's Zodiac runabout.
Make no mistake, multitouch is cool. And it may, eventually, be important. Apply the technology at a personal level, to the manipulation and visualization of complex data structures like a Facebook social network, and it could be a game changer. Furthermore, support for this interface method does belong in the operating system, because you need device driver support for it. But even if you buy that logic, I believe the multitouch project is inconsequential when compared with the bigger things we need from an OS. And I think the audience, both here at D6 and elsewhere, deserves to know what's really changing in Windows at a deep level. We can wait a bit before we worry about the surface.
Am I asking for too much? Check out this Microsoft video of Windows 7 and chime in with your thoughts:
Video: Multi-Touch in Windows 7
See also: Microsoft to add multitouch interface to Windows 7.
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Finally! After attending dozens of tech conferences in the past few months where the best giveaways were mints and baseball hats, I land at the D6 conference (all stories), where the goodie bag has, historically, fulfilled the potential of being, you know, good. This year at D6: some nice toys. See the video for the rundown.
In truth, I found last year's swag bag a bit more entertaining. Hard to top YouTube tube socks.
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Bill Gates and Steve Ballmer share the stage at D6 on Tuesday with Walt Mossberg and Kara Swisher.
(Credit: Dan Farber/CNET News.com)
Tonight at the D6 conference in Carlsbad, Calif., Microsoft CEO Steve Ballmer and Chairman Bill Gates will take the stage together. The dual interview, to be presided over by The Wall Street Journal's Walt Mossberg, will be, in part, an exit interview. Gates is stepping down from his full-time role at Microsoft (corrected: he will remain as chairman of the board) in July. We will also get an early demo of Windows 7. As Dan Farber reports, we'll see a little bit of the interface, which promises to be very shiny. I'm hoping that we go a bit deeper than that: that there's news about robustness, open architecture, and maybe even the object-oriented file system we were supposed to have in Vista.
Here's the liveblog:
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