Things but as he was mentioning.

finding developers everywhere, I think of my wife who's an architect runs a business with about 7 employees
and she recently been contracting to get a new set of IT stuff for tracking management
and she's done it by bidding things on rentacoder.com.

Actually has somebody in Peru who's doing the work for her. No doubt this is a
fascinating time. It's actually getting lower and lower costs to start new companies. In
act there are things you can do that don't require VC's. Very interesting, very interesting time.


I was going to do this with no powerpoint at all

just because I don't like crazy clip art but now that I've got powerpoint I have a piece of clip art and he's there
because of what he's holding in his hand, a mobile phone. So I'm going to talk about the internet but I'm
also going to talk about telephony and I'd just a brief comment, as with the last presentation. What's
driving this? Obviously everything that's driving IT, which is the exponential growth
in Silicon capability for the last fifty years, he exponential growth in storage capability. Those things
benefit communications but we have a couple of other things going on that benefit communications as well. The
amount of bits per second that you can cram through a single fiber has also been growing
exponentially and the only thing is people are arguing about what the rate of growth is.
This is a slide from 2001-2002 arguing that the rate of growth
actually turned the corner in the mid-90s and far exceeds Moore's Law. Now I'm not sure I believe
this. I think by 2010 if you take a 10 year moving average, you'll find it's a little closer
to a straight line but it does appear that the rate of exponential improvement in


carrying capacity of fiber-optics is going somewhat faster than Moore's Law, not doubling
every 18 months but perhaps every 14 or 16.

The same thing is happening with the amount of basically the wireless capacity. Think of the amount
of bits per second that you can crams through a fixed amount spectrum or better, what you really
ought to be measuring is the bits per second per MHz or whatever you want to measure the
spectrum in but also per physical area because you get to reuse a particular piece of
spectrum after you get a certain distance away and per watt because wireless is really
important for mobile phones, for mobile devices and there, unfortunately
battery technology is not doing the kind of exponential growth that we see in the things that are
really exciting.

And here we have a problem. This, this measure has actually been growing in a technical
sense exponentially since the end of the 19th century. Marconi demonstrated a
single radio channel voice communications in the closing years of the 19th
century. Five years later he filed a patent for a scheme that gave twenty times as much
performance. That is twenty things using what he called Resident Tuning. We've been
progressing continuously for more than a hundred years, exponential growth but that picture up there with the
30-50 mile radius around that atena tower, that's because, that's analog broadcast TV
today whereby legislation and various vested interests, we have locked in the
technology of the 1940's, so the black-and-white receiver that you bought in 1948 is still
able to receives the signals are being broadcast today. In order to do that, we have to have
many hundreds of miles of blank space before the next town can reuse that channel of
the TV broadcast space. So basically if you go into an even a, into Washington D.C.
and put a spectrum analyzer across the hundreds of MHz of intra, of really valuable
spectrum from channel 2 to channel, you know, way up in the UHF. What you find is virtually
all of it is completely unused all of the time and a few slivers are used some of the time.

We do a little bit better with cellular technology. There we sold licenses for particular slivers of
spectrum to different companies and we said you can use whatever technology you want
as long as it doesn't go out of your band. The result has been analog, 1st generation, 2nd
generation TDMA, CDMA, GSM, GPRS, 3G, UMPS, 1XRTT, EBBO.
Things are moving at a pretty great rate and there is a lot of innovation there because we didn't
put into the laws that you have to use a particular technology. Of course cellular is a relatively
small piece of the spectrum.

The most interesting thing is the unlicensed set of spectrums where we took three tiny slivers of
spectrum which were considered garbage spectrum. In fact the 2.4GHz was
something that was full of microwaves and industrial things. It was considered unusable
and we said oh, you can do anything you want there as long as it's low power and you are prepared to
except the fact that there is all sorts of interference. That little sliver where we allow some
anarchy has generated wi-fi, bluetooth, wmax, at least part of it and dozens of proprietary things.
There's more innovation happening in the tiny sliver where there is no regulation than in
everything else including the cellular area. So this has gone on for a hundred years. Technically it's
been blocked only by political and vested interests of people who build businesses around
particular opportunities. Can it go on for another fifty years? The answer is yes. I'm sitting
here using my eyeball and mighty visual cortex as a sensitive receiver in visual light
portion of the electromagnetic spectrum. I can pick out a fellow in red turtleneck where even though
he's not dissipating a single watt to broadcast red at me and I'm doing it ins dispite the fact that
there's a white noise jammer up their that's focused directly in my face. I can pick out
enormous amount of things. It's very directional, extremely sensitive. If you were to apply
that to radio technology, basically you could get, you know, 10 orders of magnitude
improvement of the sort of things we're doing right now. There is at least another 100 years of
exponential growth comparable to the last 100 years. Really, really fundamental stuff that's
happening is been going on. It's not the next few years and the only things that's blocking it is
the fact that we have government regulations and business vested interests that have bought
into the existing different scenarios who are obviously lobbying for no change
in what I currently got.

Let's move up out of the basic technologies to the most interesting thing that's happening,
obviously that's the Internet. I think we just heard all of really exciting things are happening
which are new applications, whether it be, basically the last 15 years have completely
changed the way businesses operate. Completely change the way you personally operate, with
email, with google, with the web, with you know blogging. There is just zillions of things
that happened there. It's safe to say if you sit out 50 years in the future and looked back at this
that the Internet is the most sweeping thing to a have happened for human communications
since the printing press at least.

Eventually it will subsume all of fixed telephony. All of broadcasting as we know it today. All
of mobile telephony

but I would say that we are about there because these pieces of the industry are existing things
that have regulatory infrastructure, vested interests and what ever so you can come up with
a new thing like blogging, throw out a quicky way of producing your own personal web logs
and get zillions, you know, change a complete revolution. But when you go and try to throw out
something like Skipe as a new way of doing telephony, you know, it gets people worried and
there is a lot of people both regulators and vested interests in the telephony and
the broadcasting industry who would like to see how to maintain their business as we go through
this transition. So we are very early in what's going to happen and I think it's worth stepping away from the
internet and talking about telephony, pre internet because of telephony is stil pre
internet and yet it's very, very significant. Something that most people don't know but
over the past 15 years, originally fostered by the World Bank but a lot of academics
in the dismal profession of economics have been studying what ti takes
to get economies the to develop and there is a very large body of literature now which
essentially establishes that if you want to improve the per capita GDP or the
individual productivity of an economy, the most productive thing that you can invest
in is Telecom, far more than investing in roads, or electricity or education. Now I don't want to
suggests that we shouldn't be trying to find clean water and helping disease and so forth
but if you want to help somebody up by their bootstraps, Telecom investment is the most
powerful thing to do. If you, there is zillions of interesting pieces of literature. If you want
there is a citation in my blog where I've written a couple of articles over the past year which
you can access from their which presumably these slide will be available, right.

So, mobile is taking off. None of it has anything to do with the internet but the good
news it's significantly cheaper and it provides something that an illiterate person can use.
Anybody, anywhere in the world can learn how to use a mobile phone and in minutes
use it whether they can read or write, no matter what and somebody gets a phone in a
developing country. They share it with their friends and then their are little entrepreneurs who put
together a cellular mobile pay phone and bicycle around to where the interesting sites
are that you can actually make money at where their are collections people.

So,

the internet will gain everything in the end. The issues we have

are mainly political ones about how do we go and take over existing communications and get it into
this new age.

Am I, your waving it Jim in terms of time, should I. Yeah, ok. So the internet is based on an end to end principle. David
Heisenberg popularized the word stupid network to explain. This has allowed one to
take all the intelligence out of the core, put it at the edges. That's what has created all this innovation.
We have an enormous problem today in terms of enabling that which is the access to
mention.

This again comes back to regulation and politics. If you look at the internet backbone. That is a very
wild and woolly, virtually unregulated environment. The only laws that have been
brought to bear their are antitrust regulations. There is a lot of competitors. There's a lot of different
rights of way between major cities. If you look inside the home or the
enterprise, people