5 Areas of Focus

1) How does information flow through our economic, social and political fabric?  I believe all of history can be modeled on the pathways and velocity of information.  To my knowledge there is no economic science regarding the velocity of information, but many write about it.  Davidow (OVERconnected) speaks to networks of people (information) being in 3 states of connectivity.  Tom Wheeler, someone whom I admire a great deal, often relates what is happening today to historical events and vice versa.  His book on Lincoln’s use of the telegraph makes for a fascinating read.  Because of its current business emphasis and potential to change many aspects of our economy and lives social media will be worth modeling along the lines of information velocity.

2) Mapping the rapidly evolving infomedia landscape to explain both the chaos of convergence and the divergence of demand has interested me for 20 years.  This represents a taxonomy of things in the communications, technology and internet worlds.  The latest iteration, called the InfoStack, puts everything into a 3 dimensional framework with a geographic, technological/operational, and network/application dispersion.  I’ve taken that a step further and from 3 dimensional macro/micro models developed 3 dimensional organizational matrices for companies.  3 coordinates capture 99% of everything that is relevant about a technology, product, company, industry or topic.

3) Mobile payments and ecommerce have been an area of focus over the past 3 years.  I will comment quite a bit on this topic.  There are hundreds of players, with everyone jockeying for dominance or their piece of the pie.  The area is also at the nexus of 3 very large groupings of companies:  financial services, communications services and transaction/information processors.  The latter includes Google and FaceBook, which is why they are constantly being talked about.  That said, players in all 3 camps are constrained by vestigial business and pricing models.   Whoever ties/relates the communications event/transaction to the underlying economic transaction will win.  New pricing will reflect digitization and true marginal cost.  Successful models/blueprints are 800, VPN, and advertising.  We believe 70-80% of all revenue in the future will derive from corporate users and less than 30% will be subscription based.

4) Exchange models and products/solutions that facilitate the flow of information across upper and lower layers and from end to end represent exciting and rewarding opportunities.  In a competitive world of infinite revenue clouds of demand mechanisms must exist that drive cost down between participants as traffic volumes explode.  This holds for one-way and two-way traffic, and narrow and broadband applications.  The opposing sides of bill and keep (called party pays) and network neutrality, are missing the point.  New services can only develop if there is a bilateral, balanced payment system.  It is easy to see why incumbent service and application models embrace bill and keep, as it stifles new entrants.  But long term it also stifles innovation and retards growth.

5) What will the new network and access topologies look like?  Clearly the current industry structure cannot withstand the dual onslaught of rapid technological change and obsolescence and enormously growing and diverging demand.  It’s great if everyone embraces the cloud, but what if we don’t have access to it?  Something I call “centralized hierarchical networking” will develop.  A significant amount of hybridization will exist.  No “one solution” will result.  Scale and ubiquity will be critical elements to commercial success.  As will anticipation and incorporation of developments in the middle and upper layers.  Policy must ensure that providers are not allowed to hide behind a mantra of “natural bottlenecks” and universal service requirements.  In fact, the open and competitive models ensure the latter as we saw from our pro-competitive and wireless policies of the 1980s and 1990s.

In conclusion, these are the 5 areas I focus on:

1)      Information Velocity

2)      Mapping the InfoStack

3)      Applications and in particular, payment systems

4)      Exchange models

5)      Networks

The analysis will tend to focus on pricing (driven by marginal, not average costs) and arbitrages, the “directory value” of something, which some refer to as the network effect, and key supply and demand drivers.