Inventing the Future:
Well, That Was Weird

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On May 7, 2011, my old-man-iest birthday yet, Teleplace stopped paying me. More about the circumstances another time, but what was I to do now? I had been working on Croquet for seven Halloweens, and I had no standard-label skills. My specialty is weird shit — the stuff that happens before there is an established technology stack. For 25 years, this had been at smaller companies selling to larger companies, as enterprise (or the military) had been the only ones who could afford such bleeding edge tech.

Surely since the iPad came out a year before, and probably earlier, this is no longer true. The consumer market is now the place to be. As I already had a year doing weird shit on mobile, I decided to work for Palm. I started on D-Day, just before the launch the TouchPad tablet. Ouch! It turns out that the wise men and women of the HP board think consumer mobile is just about the worst thing in the word to do. I don’t know what will become of the HP division formerly known as Palm, but I’m not sticking around to find out. Friday was my last day.

While I learned a lot at Palm about consumer product production, I don’t think I’ve picked up any positive examples about how the consumer market drives technology and product development. So tomorrow I’m off to TuneUpMedia, a company based on music metadata. There’s nothing more consumer-driven than music, and TuneUp has devoted itself to being smart about its users. The company has substantial revenue directly from end-users (which is very different from how Enterprise Software works), but also has third-party partnerships in the “two-sided market” arrangement so common to consumer tech. I’ll be working again with Teleplace founder Greg Nuyens, who is aggressive about technology development, but conservative about the product direction as experienced by users and partners. Just what I want to see.

My Thoughts Exactly:
Further Thoughts on Being the Future of Printed Fiction, with a Side Disquisition–Traveling Geek Self-Publishing Novelist Blues: the Strange Loop Variations

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Some whiles ago I published a long accounting of my decision to head on out to the uber hacker conference Defcon in 2010 to sell my geekoid novels, and what happened when I did. I entitled that post “Traveling Geek Self-Publishing Novelist Blues: the Defcon Variations”, and it has become one of Wetmachine’s most popular stories ever.

Some little while after I wrote that piece, the pioneering cyberpunk author and celebrity curmudgeon Bruce Sterling referenced my blog in his vastly more influential blog on the Wired site, Beyond the Beyond, in a post he called The Future of Printed Fiction. In an oblique way, Sterling more or less said that sellers of printed novels would become kind of throwbacks to itinerant tinkers and rag-and-bone men of a hundred and more years ago. His tone was pretty snarky, as it always is (a friend wrote to me “if you catch a whiff of smug condescension, you can probably trust your nose”). My pride might have been a little hurt that Bruce Sterling was responding to me as a curio, a rag-and-bone man, not as a fellow writer in his genre, but in general I was happy for the attention. His article helped me sell some books and may even have given me the last little nudge I needed to get my panel on the future of the novel accepted at SXSW last year. I responded to Sterling’s post here, and he and I then had a friendly but brief email exchange in which I offered to send him copies of my books (print or ebook), and he declined.

I introduced myself to Sterling in person at SXSW when I saw him sitting in the front row of the grand ballroom where Tim O’Reilly was being interviewed on stage. After Tim’s convo I approached Sterling: “Hi,” I said. “I’m John, the future of printed fiction!” He shook my hand with a limp handshake and asked me how I did. (I hope I didn’t scare him!) A few days later I went to hear his closing SXSW keynote talk — an astonishing, almost Timothy Leary-hallucinatory thing, about which more at some other time, perhaps.

Since returning from SXSW (and as a direct consequence thereof) I’ve become added to a private listserv that discusses the future of the book & publishing & libraries & reading in general. The list is populated by several dozen publishing luminaries like Tim O’Reilly, at least one nobody (me), and several dozen other people whose literary luminescence is hard for me to gauge.

Every day on this list there are discussions of things like the Google Books case, the closing of the Borders bookstore chain, the idea of agency pricing, copyright law, libraries as digital distributors and community centers, Amazon’s strategy as a publisher and retailer, and similar topics. The demise of the bookstore is a perennial theme. (I used to sell lots of copies of my books through technical bookstores, many of them in Silicon Valley and near Boston. They’ve all gone out of business. I seldom sell a book through a bookstore these days.)

Lately I’ve been thinking about the phenomenon of the vanishing bookstore, the ubiquity of the ebook, and how right Sterling probably was when he said of future of printed fiction, “It’s all about being a make-do gypsy at the fringes of the web conference scene. Gothic High-Tech, Favela Chic.”

Below the fold: I take my act to Strange Loop.

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Tales of the Sausage Factory:
Will Wall St. Put The Kibosh On The AT&T/T-Mo Takeover Before the DoJ Does?

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The more I see AT&T frantically spend money like water and call in every political chip it has to try to pressure the Department of Justice to settle its case, the more I become convinced that it will ultimately be the Wall St. financial community that will finally persuade Randal  Stephenson to give up before AT&T gets to trial. Oh, I expect to see more wild gyrations. There’s perpetual whispers that AT&T will find a dance partner in the form of MetroPCS (the current favorite of the rumor mongers) or Leap or U.S. Cellular (one even occasionally hears Sprint, but that doesn’t even pass the laugh test) and they will publicly announce some big proposed settlement so that AT&T’s political friends and its cadre of honest politicians can howl some more for DoJ to settle. Who knows? We have five months until trial, and AT&T seems infinitely capable of making all sorts of political noise.

But the more I look at it, the more convinced I become that the upper management at AT&T and that of T-Mobile’s parent, Deutsche Telekom (DT), have not really thought through just what kind of a settlement they would now have to offer and how radically different it is from what AT&T expected to offer before DoJ brought suit. A settlement now is far, far more expensive than anything AT&T envisioned and quietly vetted with Wall St. analysts back in March. Back then, AT&T expected to divest from 30-50 midsized markets via a divestiture trust (allowing them to sell licenses at profit-maximizing prices over time), some wussy roaming and deployment conditions that could be easily evaded or ignored. Now, AT&T will need to divest enough to create a “T-Mo Lite,” something that can at least pretend to replace the loss of a national carrier. As I explain below, that becomes so expensive and complicated that even if AT&T can find the financing to make it happen, its stock is likely to tank on the mere announcement of such a deal.

Mind you, I am not saying a settlement is desirable or good policy. I continue to believe that AT&T’s take over of T-Mobile is so thoroughly awful as a mater of both antitrust and telecom policy that no conditions or divestitures can save it. But even discounting my opinion on the matter, there are certain practical realities that make a settlement at this point not merely bad policy, but so expensive and complicated to manage that it is effectively impossible.

If I’m right, the only question is how much shareholder money and political capital AT&T spends lobbying for a settlement that can’t be done for financial reasons before enough officers on the AT&T and DT Boards sit down AT&T CEO Randal Stephenson and DT CEO Rene Obermann and explain to them that the time has come to face reality, renegotiate the break up fee to let DT out early, and cut their loses before AT&T stock starts to tank big time.

I demonstrate why below. Warning, as this is a “show your work” thing, it’s kinda long . . .

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Tales of the Sausage Factory:
Deutsche Telekom Keeps Messing Up “T-Mo Is Doomed Unless AT&T Buys It” Song By Explaining Who Else Could Buy T-Mo

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 Two weeks ago, Deutsche Telekom (DT) Chief Technology Officer Olivier Baujard accidentally spoke truth about T-Mobile to an audience of German investment analysts. After running through the usual company talking points about the effort to sell T-Mobile to AT&T (e.g., it will happen, DoJ is just playing hardball with negotiations, etc.), Baujard said at a public presentation at a Paris broadband conference that: “any rational company had a Plan B and that Deutsche Telekom had other opportunities for its U.S. operations should the U.S. Department of Justice succeed in terminating the deal.”

This is vitally important because, after accidentally shooting the “this is the only way to bring 4G to rural America” argument in the foot by accidentally leaking documents proving AT&T could bring 4G to rural America whenever it wants, and T-Mobile killed the ‘this will create jobs’ argument by confirming that it was preparing pink slips for more than 20,000 employees after the acquisition gets approved, the “T-Mobile is a sickly gazelle” argument is about all AT&T and it supporters have left. Unfortunately for AT&T, this is not the first time Deutsche Telekom has screwed up the “sickly gazelle” storyline by revealing inconvenient truths about its other options. And while there is usually a rule in Washington that “we totally ignore what you say to investors when it contradicts your chosen story,” this deal is sufficiently high profile and has sufficient problems that eventually someone may notice if AT&T’s “Sickly Gazelle Chorus” keeps getting thrown off key by Deutsche Telekom’s “We Have Lots of Other Options Counterpoint.”

More below . . . .

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My Thoughts Exactly:
Attention DEFCON planners! I’m your huckleberry!

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Sometime last week the @_defcon_ twitter account of the Defcon annual hacker’s convention put out this tweet:

“who should we invite to DC 20 as a special guest? Which actor, Sci-fi writer, famous scientist, or uber hacker, who would you like to see?”

So I immediately responded that they should invite me. (Or, failing that Donald Knuth or George Church.) As far as I can tell, only a few other people responded to the tweet.  Suggestions included David Hasselhoff & Douglas Hofstadter. (There’s probably more discussion going on over on the Defcon Forums. . . remind me to check that out.)

But as much as I would love to hear Knuth or Church speak (among others) I really do think they should make me John Sundman the Defcon 20 special guest. Why? See below the fold. Continue reading

Tales of the Sausage Factory:
A Pocket Guide To What Happens Now That Network Neutrality Rules Are Officially Published.

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Hey everyone, remember back at the end of last year when the Federal Communications Commission (FCC) adopted the better-than-nothing-but-still-painfully-disappointing Network Neutrality rules? Well, after a long and winding road, which included bouncing back and forth between the FCC and the Office of Management and Budget a few times and a premature challenge by Verizon, the rules were finally published in the Federal Register today. So without getting into the merits, here is what to expect procedurally.

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Tales of the Sausage Factory:
Quick Thoughts on Today’s Status Hearing in United States v. AT&T

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By all accounts, the main event on the status hearing was — as expected by lawyers — fairly boring. I am not sure why some folks think that splitting the difference between AT&T and the DoJ on timing was a win for AT&T (AT&T wanted January 16, DoJ wanted March 19, Judge picked Feb. 13).  It is, I suppose, consistent with those who thought picking the later date would be a sign the judge wanted a settlement. i.e., there are those who just can’t believe AT&T is going to win this and therefore everything is somehow an advantage to AT&T no matter how it turns out.

The more interesting note was the decision not to join Sprint and Cell South’s complaints to the DoJ case and setting a date for AT&T to file a motion to dismiss. That was a modest victory for AT&T, but not terribly indicative of where the DoJ case is going. It is rare for private litigants to file to enjoin a merger, and antitrust commentators have noted the trend in the last 10 years to make private antitrust cases more difficult to bring as a matter of standing. I suspect if Sprint and Cell South survive the motion to dismiss on standing grounds the cases get joined, as they are related cases. But it also would not surprise me if Sprint and Cell South get dismissed on standing. As will no doubt be lost on everyone if that happens, it won’t really tell us one way or another about the merits.

All in all, pretty much what one expects in such a case — although I feel bad for the DoJ lawyers who just lost their Christmas and New Year holidays. Be interesting from a legal perspective to see how the motion to dismiss goes. Meanwhile, we await the FCC.

Stay tuned . . .

Tales of the Sausage Factory:
Why AT&T Can’t Just Cut A Deal With Leap or MetroPCS and Call It A Day

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The latest AT&T ploy to convince the gullible that it’s planned acquisition of T-Mobile remains TOTALLY AND COMPLETELY ON TRACK and that everyone should just ignore the minor little tiff it has with the Department of Justice (and 7 State Attorneys General) involves pretending to pick potential rivals as recipients of any divestiture agreement. I say “pretending” because AT&T has either conveniently forgotten that such transfers need FCC approval or has reassured everyone involved that the FCC will rubberrstamp any settment AT&T negotiates. My personal theory is that AT&T’s “outreach” to supposed potential buyers is solely for theatrical effect so it can claim to be in “negotiations” with “interested parties” at the upcoming status conference.

In any case, AT&T’s claims to be negotiating such settlements should be greeted with a healthy dose of skepticism, and not merely because the sources for this story are “two people with direct knowledge of the situation” who refuse to be identified. The sheer regulatory mechanics of such a settlement make it highly improbable, if not outright impossible for AT&T to negotiate and get approval for such a settlement before T-Mobile can claim its break up fee.

I explain in greater detail below . . . .

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Tales of the Sausage Factory:
What’s At Stake in United Stated v. AT&T, Inc.? The Future of Antitrust. (Part I)

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The Department of Justice (DoJ) Antitrust Division challenge to the AT&T/T-Mo deal, United States v. AT&T, Inc., in addition to being a huge deal for us in the telecom world, is probably the single most important merger review case for the next ten years. In two ways, this has become a battle about the future of antitrust enforcement and the soul of the Antitrust Division.

Yes, that sounds melodramatic, but I make no apologies. As I explain below, this case has become a test case for the nature of antitrust and whether traditional metrics of concentration and market share, notably the Herfendahl-Hirschman Index (“HHI”), coupled with the concerns that such concentration predicts both the ability of the largest company to raise process and for all surviving companies to raise process (the “coordinated effects” test), will still have validity going forward.  If the court accepts the arguments from AT&T and its defenders that the traditional measures of concentration are irrelevant, then antitrust review of mergers will essentially end for the next 5-10 years while economists and antitrust enforcers struggle to develop a new set of metrics for predicting the likely impact of mergers.

More importantly, however, this case represents a clear decision of the Antitrust Division to move ahead with enforcement despite the possible political consequences. Yes, politics has always mattered, and anyone who rises to the position of Assistant Attorney General for Antitrust has a well-developed political sense. The back channels for unofficial influence remain strong, and only a brave head of the Antitrust Division, whether or Acting or confirmed Appointee, seeks to challenge the most powerful and well connected companies in Washington.

But we have not yet reached the point where the head of the Antitrust Division decides to enforce the Antitrust law and the White House tries to pull it back. This may seem a small thing, but it is what separates us as a country that can still aspire to say it follows the rule of law and a country like Russia where  law enforcement is simply the extension of the policy of the ruling oligarchy. And I assure you, oh cynical reader, that when we cross that threshold you will know the difference between a society where influence matters and a society that has abandoned any pretense of the rule of law.

I shall reserve this second point for a separate post. I address the legal significance of the case below . . .

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Tales of the Sausage Factory:
DoJ Says “No” To Ma Cell; Here’s What Happens Next (and Why It’s All Over But The AT&T Screaming)

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In what is undoubtedly the best Labor Day present the Department of Justice ever gave America, DOJ has filed to block the AT&T/T-Mobile Merger in court. One should not, however, expect AT&T to give up easily. AT&T can, and almost certainly will, decide to fight rather than simply abandon the deal. If nothing else, it has $6 billion in break up fees to pay if the merger does not go through. On the plus side, the odds definitely favor the DoJ, which is why so many companies simply abandon the merger once DoJ has filed.

Meanwhile, the FCC, an independent agency, still needs to make its decision on what it will do. Unlike DoJ, where the head of the Anti-Trust division makes the call (subject to the usual political checks, of course), the FCC must have a vote on an Order, which must get a majority of the Commission (3 votes). Since Congress repealed the FCC’s ability to immunize phone mergers from antitrust back in 1996, the FCC cannot approve if DoJ wins in court. OTOH, the FCC is under no time pressure, and can wait to see how the court case turns out. At the same time, however, the court may decide to stay consideration until the FCC decides, since the merger cannot proceed without FCC approval.

All of this has huge implications for AT&T and its current bluster that it will fight DoJ for the right to eat T-Mo. Normally, AT&T could hope to get this wrapped up in a few months, and continue to try to use its political muscle to force a settlement. But the interaction between DoJ’s challenge and the FCC lawsuit make it incredibly difficult for AT&T to get this done before Deutsche Telekom decides it wants it $6 billion cash ‘n spectrum break up fee. As I explain below, AT&T must simultaneously persuade the FCC not to act while convincing the court to move at super speed, despite the fact that the usual way things work is for courts to wait for agencies to finish review (because the agency may remove the need for the court to act).

I explain AT&T’s legal problems below . . .

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