Ged Carroll

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  • Internet freedom

    A couple of stories related to internet freedom that came to my attention this morning.

    Internet freedom in China

    First off today’s New York Times magazine has an indepth feature about the challenges that China presents to Internet companies seeking a Chinese audience. Google’s China Problem (and China’s Google Problem) by Clive Thompson is balanced and well written. There are some interesting aspects to it:

    • The censorship is open rather than furtive
    • It involves self-censorship as a key element in it’s execution
    • Chinese people interviewed do not view freedom of speech as an absolute binary state (you’re free or you’re not) but as a continuum and are prepared to make trade-offs; so Google’s ‘Do the least evil’ approach makes more sense
    • The role of chat and forums in Chinese internet usage is far higher than we’re used to
    • The assumption that the US readership of the article enjoy ‘absolute’ freedom of speech and a resulting internet freedom

    The last point brings me on to the text of a speech given by US attorney general Alberto R. Gonzales at National Center for Missing and Exploited Children. 

    US threat to internet freedom

    Vigilant civil rights activists have noticed a number of items in the speech which would extend the government powers of censorship and surveillance well beyond child pornography with the implication being that in future US legislation freedom of speech and internet freedom may not be the absolute that it once was.

    Lauren Weinstein of pressure group People for Internet Responsibility made the following post to the Interesting People email list:

    In a speech a few days ago, Attorney General Gonzales announced DoJ plans to send Congress new legislation to control “pornography” and (apparently) ultimately to require activity log and other data retention by Internet Services (in follow-up interviews, Google and other search engines have been specifically discussed). Gonzales is pitching this legislation using child abuse as the hook. That is, he is arguing for tools to use against child abuse and child pornography — certainly a “third rail” issue these days where virtually everyone will support enforcement efforts. However, it’s also clear that the DoJ seems to have no intention of limiting such tools *only* to child-related areas. The legislation itself is currently titled: “Child Pornography and Obscenity Prevention Amendments of 2006”

    A transcript of the Attorney General’s speech is here:
    http://releases.usnewswire.com/GetRelease.asp?id=64319     Note this key quote: “This legislation will help ensure that communications providers report the presence of child pornography on their systems by strengthening criminal penalties for failing to report it. It will also prevent people from inadvertently stumbling across pornographic images on the Internet.” Requiring the reporting of child pornography on systems (when it is known to exist) is something that few people would argue against, obviously.

    But let’s examine the second sentence again: “It will also prevent people from inadvertently stumbling across pornographic images on the Internet.” This seems to be addressing the entire broad category of non-child “pornography” (which of course can be defined in any number of ways in different locales and contexts), and suggests a requirement (here we go again!) for proactive ratings/controls (presumably ID or credit

    card based for “offensive” materials) for all (U.S.) Web sites. So this isn’t just about children, it’s likely about broader government controls over many U.S.-based Internet entities (of course, Gonzales doesn’t effectively address the issue of Web sites outside the country). Gonzales goes a lot further in another quote:

    “The investigation and prosecution of child predators depends critically on the availability of evidence that is often in the hands of Internet service providers. This evidence will be available for us to use only if the providers retain the records for a reasonable amount of time. Unfortunately, the failure of some Internet service providers to keep records has hampered our ability to conduct investigations in this area. As a result, I have asked the appropriate experts at the Department to examine this issue and provide me with proposed recommendations. And I am going to reach out personally to the CEOs of the leading service providers and to other industry leaders to solicit their input and assistance. Record retention by Internet service providers consistent with the legitimate privacy rights of Americans, is an issue that must be addressed.”

    Again, we see that protecting children — the goal that we all support — is being used as the raison d’etre to likely later propose broad data retention requirements on all manner of Internet services. Ironically, this is occurring shortly after calls for mandated data *destruction* legislation that arose in the wake of the DoJ vs. Google records battle (where I strongly supported Google’s stance).cted that this sequence would occur — though it is happening even faster than I expected. Record retention is a particularly risky area. DoJ might be expected to argue (as Gonzales implies) that such records would only be demanded in cases involving children.

    That’s today’s line. But in a general records retention environment, you cannot a priori retain only the records related to child abusers whom you don’t already know about — you must retain *everyone’s* records. While the criteria for records access might be child abuse today, does anyone seriously believe that calls for access to user log data will not massively expand over time, to the extent that such data is available? Of course it will. If the data exists, all manner of ostensibly laudable reasons for government digging through users’ Internet activities will be forthcoming. And that will create a wholly different kind of Internet, where ultimately our every action on the Net may be subject to retroactive inspection. The term “slippery slope” is definitely applicable.

    We need to see the specifics of legislation before detailed comments will be possible. But the handwriting is on the wall, and it does not bode well for either Internet users or Internet-related services.

    More related content here.

  • Pop Truth and Power at the Coca-Cola Company by Constance Hays

    The journey back north gave me time to read Constance Hays expose of the accidental success that is the Coca-Cola company Pop Truth and Power at the Coca-Cola Company.

    The book was a bit repetitive in parts and could have been reined in with some proper direction and editing, but that’s a problem of the editor rather than the author per se. Despite these flaws it provided an interesting insight into how a company had become such a colossal success in spite of itself and a parable on what happens when you try and shaft distribution channel partners.

    The Coca-Cola Company used interesting accounting arrangements and stuffed its distribution channel in order to deliver results. But this just moved revenue allowed them to book revenue early rather than creating business growth. In this respect is similar to the way IBM started selling rather than leasing mainframes to book sales early whilst personal computing ate into its business market. It used an off-balance sheet transaction to set up a separate distribution company and then buy up its partners bottling operations. Eventually this arrangement together with product disasters like New Coke and Dasani caught up with them

    Unlike Enron these weren’t bad people, they were just trying to keep Coke enjoying the kind of success it had always been in a changing world. The changing world increasing dominated by savvy consumers and operators like Wal Mart that have a touch of the night about them. Where it gets interesting is how someone like Warren Buffett could get taken for the ride by the Coca-Cola Company.

    It is full of high-drama like directors being called to meetings in distant aircraft hangars, being fired by key shareholders and then all of them going home in their own Gulfstream jets – quality, you couldn’t make Pop Truth and Power up, even if you wanted to.

  • Charles Dunstone

    Charles Dunstone at LSE Entrepreneurs Group

    On February 27, 2006 Charles Dunstone founder and CEO of Carphone Warehouse spoke at the London School of Economics Entrepreneurs Group.We posted Charles Dunstone’s main speech here straight after the meeting, but didn’t have time to type up some of the interesting responses that came out of the Q&A session afterwards. Commentary by Charles Dunstone is in italics.

    On funding…

    Funding Carphone Warehouse was partly luck because of being in an amazingly fast-growing marketplace. Probably the most amazing part of it was that I put my 6,000 GBP of savings into the business; from 1989 to 2000 there was never any other investment in the company and we never borrowed any money.

    We just used our working capital and what became part of our DNA was ‘make sure you’ve sold before you’ve got to pay for it’ and we funded the whole business from our suppliers. Erm, I’ve no shame about that at all their money is the cheapest and least questioning money you’ll ever get. So, the great thing is to get supplier funding in whatever you do, they’re much less likely to throw you to the wolves like the banks or a venture capital company or someone are. And I guess the second part of that is, however tempting it is at the time, equity is priceless. I see lots of people who are trying to raise a bit of money and they feel like they’re giving away the equity to raise the money. They’ll rue that when the business is successful and is worth a lot of money. Do everything you can not to give equity away.

    On Vodafone…

    In reality at the time, everyone says they paid an awful lot of money for Mannesman, by buying it with overinflated paper. It was a ludicrous exchange rate with over-inflated share prices and I think that thing that people should be ever respectful of what Chris Gent managed to achieve was a very, very simple rule if you look at every transaction that he made: he bought for paper and sold for cash.He never exposed, if he was over paying for a business it was because the stock market was too high, he was just as high as the business that he was acquiring in the long term he made sure that he got cash in the bank. That is why when we come to 2001 or so Vodafone was the only telco that didn’t have massive amounts of debt; BT had to demerge Cellnet or O2 as it is now, France Telecom and Deutsche Telekom had to sell assets they had run up enormous debt.

    On maintaining a strong internal culture…

    Passion is difficult and I kind of refer to the point that I didn’t, wasn’t really sure how we created the culture. Part of it was my personal involvement. I think that a lot of it is consistent leadership. Leadership may not get everything right, but the bigger the organisation the greater the need for a sense of consistency, a sense of orientation and the values of that organisation.

    And if I look at the people that supply us, its very interesting to see how their fortunes have changed. Originally you had Vodafone with very consistent leadership under Jerry Went and then Chris Gent, then you had Orange with very consistent leadership under Hans Snook at the same time you had One-2-One and Cellnet had different CEOs every two years business all over the place: absolute chaos.

    Then you get a change: Orange gets sold, France Telecom changes the leadership of Orange constantly: Orange becomes a complete mess. O2 gets consistent leadership, O2 becomes a successful business: sold to Telefonica for enormous sums of money and through all of this I don’t think that you can underestimate the value of having really consistent leadership. This has an impact on passion and people.

    On VoIP (voice over Internet Protocol)…

    I think that the difference between Europe (particularly the UK) and the US is that VoIP will be very big in businesses, in residential homes you can’t have broadband without having an exchange line: that’s the way the regulator has decided it wanted to make sure that BT can make a living. If you’ve got broadband, if if you don’t want it, if you pick your phone up you’re going to get a dial tone that you can make a phone call from. Once you’ve got broadband unbundling, once you’ve got a connection from the exchange to the home it doesn’t cost you anything to connect a call whether its over broadband or you pick the normal phone up.

    So suddenly a normal phone has the exact same economics as Skype, so I think what will happen, what you will see people like us do is offer VoIP-priced services on your normal phone at home without you having to put a headset in your PC or mess around and do all that kind of stuff. There are some people who will find reasons to do it and things that they want to do within it. The majority of people with a fixed-line are people with a family, over 30 years old, 50 per cent of it is there home alarm and ring people, 50 per cent of it is that they want to be able to ring the fire brigade if the house catches fire in the middle of the night. You won’t get them to use their mobile or use VoIP as they want to sit by their bed, get a dial tone and dial 999.

    So I think in residential its not going to have a massive impact, in businesses its a different thing, with VoIP you can have multiple lines over one exchange line and that’s going to completely revolutionise business telephony.

    Vonage is already more expensive than we are for your phone service and we’re not even using an unbundled broadband line on it. The economic difference is very different here than it is in the US.

    On where mobile phones are going…

    I don’t have a clue where things will be in ten years. A few predictions on mobile phones, it is a unique device because the last 15 years have changed the world, more than it had changed for 500 years before that. 15 years ago, no one left their home without their money and their keys, now no one leaves home without their keys money and mobile phone and its taken a part in peoples lives that no other product has for hundreds and hundreds of years.

    That relationship is so powerful that if a producer wants to gets content to you, they can guarantee if if they can get it to a mobile phone, so that’s why we see cameras, now everyone carries a camera and a mobile phone. Soon everyone will be an iPod and a camera and they’ll keep getting better and better. By next Christmas you’ll be able to buy cameras with flashes, zoom all this kind of stuff. I think that video is going on mobile phones, I think that payment is coming, payment systems is coming onto them and Carphone Warehouse is the largest retailer of digital cameras in the UK by accident. We didn’t mean to sell one of them, they just come in the products that we sell as standard and its just that everyone else’s business is morphing into ours because of the unique relationship the product has.

    My final prediction on phones on the next year to two is that fashion is about to become a big thing in phones, at the moment they are driven by technology. We had an extraordinary experience this Christmas with a pink(Motorola RAZR) V3 we brought out. We’ve done some analysis that absolutely blew us a way, you’re starting to see the manufacturers talk to the big brands about putting things into phones and people spend stupid money on pens and watches and shoes and clothes. I think that all that madness is also going to end up in mobile phones as its such a public personal accessory.

    On the competiton…

    I’ve basically got two types of competition: people like Phones4U and The Link who are trying to do what we do and we just get up early and try and do it better and try and beat them up every day. And we have a team, we meet at 8 am every single morning and look at everybody else’s prices and reprice based on what happened that day its that brutal. We fight, fight, fight.

    My other competition is the network stores which is a combination of wanting to have some direct impact with customers and a certain amount of vanity about wanting their brand on the hight street. They don’t compete with us in terms of the volumes of sales that they do, as the market gets more fragmented I think that its less likely that the customer is going to say I just want to go and see the world according to Orange today, rather than even going to one of my normal competitors. In reality it will be let me go and compare Orange with everybody. I think that its going to change but there’s not a very strong economic rationale for them in the first place.

    On handsets…

    The networks are kind of frightened by handsets, as its the handsets that drive churn in the marketplace, the networks would like to just to have a dozen hand handsets across the world. We know when we talk to customers that handsets are the only reason that they’ve come in the first place. People love handsets, they hate networks; so they want to see the widest possible range of handsets available.

    On the role of technology in solving world poverty…

    I have no idea, but I have my doubts and I don’t stand here saying that the mobile phone is a fantastic thing that has improved the world, you can easily argue that actually the mobile phone and Blackberry and these kind of devices are doing are polarising the world and are allowing certain people to have even more power and faster decision making and disenfranscishing a huge proportion of the population. So I am no defendant of the mobile phone, people want to buy them, they feel that they can’t live without them; then its my job to help them with that.

    The developing world has made the leap absolutely and it may well be that they never feel the need to go and dig the street, dig the roads up and put copper in. However, I am skeptical as to the mobile phone as those peoples communications needs develop will ever give them the access speeds that they will really want to run fast broadband-type services. At some stage someone is going to have to do something: maybe its four G, WiMax whatever to bring high-speed bandwidth into those areas. McNicholas aren’t going to dig the road up to put in more copper wire. We use it in countries like this because its there and why wouldn’t you? If you were rolling it out here again you probably wouldn’t do the same thing.

    On the transition of phones to computers…

    Absolutely they’re changing into computers, they start to have bugs, they start to have all kinds of usability issues. Our job is very simple and I think the worst thing that could have happened for me is that there could have been one mobile phone network and one really simple phone and the people understand it so that they did not need anyone to help them set it up and work out which one to buy. So we absolutely love complex markets as this gives us something to offer and something to do we have to keep changing. I just watch in delight as Microsoft come into the marketplace because that’s not going to work is it? Its going to have lots of bugs and crash and do all these sorts of things that needs tons of support. Lots of competing systems Symbian and others, so its another level of complexity alongside all the complexity of the operators, all the complexity of the tarrifs – Bring it on.

    On suppliers...

    We have a guy at one of our suppliers who we’ve named Del Amitri from that song ‘nothing happens, nothing ever happens at all’.

    About Charles Dunstone

    Charles Dunstone is the founder of Carphone Warehouse. Dunstone had been working at NEC as a sales man after dropping out of university. NEC was an early cellphone manufacturer and saw the opportunity. Charles Dunstone and two partners started the business out of Dunstone’s flat on Marylebone Road in 1989. This was back when mobile phone contracts were sold by companies over the phone and by fax. The average tabloid newspaper back then would have had a good readership from self employed tradesmen, and the pages between sports and TV were covered in adverts for companies like his. As Carphone Warehouse grew, Charles Dunstone expanded its retail footprint to most high streets.

    Over time Charles Dunstone branched out into consumer electronics sales with Best Buy. Eventually, Charles Dunstone merged Carphone Warehouse with the Dixons Group. More business related content here.

  • Four Things

    Drew B has linked to me in a meme called 4 things. In this people who have been linked to name a number of different items in groups of four and then link to four other blogs that they know of that could continue this one.In typical Wired reader style, this concept of an idea that can be communicated is called a meme (and memes are often written about in digerati circles).

    Classic memes that non-geeks would have heard of include the ‘Frankie Says’ series of t-shirts and ‘No, but Yeah’, but No dialogue from Little Britain.

    Why 4?

    Three or six are the perfect numbers according to a discussion between Lee van Cleef and Clint Eastwood in The Good, The Bad and The Ugly. Wikipedia couldn’t shed any light on it either.

    Four jobs I’ve had

    Agency drone – at present
    Shift leader     – heading up a shift team on the bitumen plant in what was then UK’s second smallest oil refinery
    DJ     – up north, and a few times in London
    On the line     – in a meat packing plant and various other factories as a student

    Four movies I can watch over and over

    All the Presidents Men

    The Dollars Trilogy (particularly For a Few Dollars More)

    The Usual Suspects

    Silmido

    Four TV shows I love to watch

    I don’t have a television but I do have a soft spot for vintage shows, here’s four that came to mind:

    Four places I’ve visited on holiday

    • Dublin
    • Leiden
    • Ibiza
    • Paris

    Four favourite dishes

    • As my mate Griff would say ‘a big bowl of fuck-off’ (a ramen noodle dish from Wagamamas)
    • A decent Irish fried breakfrast with proper black and white pudding and a side serving of soda bread
    • Rhubarb crumble
    • A well done tuna steak

    Four places I’ve lived

    • Liverpool
    • Galway
    • London
    • Huddersfield

    4 sites I visit daily

    It would actually be a hell of a lot more than this but: Slate.com, Wired.com, RTE.ie and ThinkSecret.com

    Four places I’d rather be

    Singapore, in a coffee shop, record shopping, sat in front of a range enjoying a turf fire

  • Working class

    I was prompted to think about the working class thanks to an interesting opinion piece The Great Divide by James Delingpole in the Sunday Times Style magazine (February 5, 2006) about a division in the middle classes between the haves and the have-nots. The haves stay in Tuscany and go on ski-ing holidays.

    My own thoughts on this is that the working class haven’t gone away, they just slave away with a phone, the laptop and the Blackberry. The have-nots referred to in the article are the normal working class folk of yore. They are the infantry of the knowledge economy. In place of soot-covered waste coats or donkey-jackets it’s suits-and-ties or media casual.

    I have no problem calling myself working-class. I learned my trade as a PR person by working with great people in the same way that I served my time as an apprentice in the chemical industry in my early 20s.

    They have the same fears as the working class of past decades with the fear of their jobs being exported to India or China rather than seeing their factory closed down by foreign competition. Self-service online and IT-driven business process management in banks has replaced robots and automation on the factory floor.

    I found it particularly interesting that Delingpole assigned education and politeness with middle class society. The working class neighbourhood I grew up in was not full of cavemen: respect for yourself and others was something that was drilled into me. Indeed, I still occasionally have that uniquely Irish refrain from my mother asking me ‘not to disgrace the family-name’ ringing in my ears.I worked in many jobs from managing a tightly knit production team, to working on a factory line, being a cleaner, being part of a call-centre hive, banking and working in PR. It was in the middle-class environs of the PR agency life where I saw the most morally repugnant mistreatment of fellow colleagues and peers practiced.

    With regards education, there has been a long tradition of a well-read working class, indeed some of the ‘new’ universities sprang out of mechanics institutes and other places of working-class education. The things that stood me in good stead for working in the knowledge economy were:

    • The wide range of reading that I did whilst working shifts in the oil industry and have carried on since
    • The work ethic that my gaffer taught me as an apprentice
    • A practical approach to problem solving that I picked up working in the chemical industry
    • The typing tutor software on the mini-computers that we used in the oil refinery and other places that I worked at

    My university degree just got me in the door at my first ‘graduate’ roles. The under-class of today are the dispossessed bypassed by the knowledge economy, rather like the farm workers left by land reforms and the industrial age. The working-class education is now a combination of the state education system, public libraries and the worldwide web were institutions like MIT Open Courseware and Wikipedia which equate to the mechanics institute of today. It will be interesting to see if or how these new working-classes get organised. If you would like to read more consumer behaviour related content, you can find it here.