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| http://www.gilder.com/
| Issue 267.0/October 13, 2006
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HEADLINES:
- The
Week / George Gilder: The Information Factories
- Friday
Feature / The
Real Objective of Net “Neutrality” Regulation
- Friday
Blogger Bonus / Infinera
vs. EZchip
- Readings /
The
Week / The
Information Factories
George Gilder, Wired, “The Information Factories”: Although the evergreen mazes,
mountain majesties, and always-on skiing surely play a role, two amenities in
particular make [The Dalles] the perfect site for a next-gen data center. One
is a fiber-optic hub linked to Harbour Pointe, Washington, the coastal landing
base of PC-1, a fiber-optic artery built to handle 640 Gbps that connects Asia
to the US. A glassy extension cord snakes through all the town's major
buildings, tapping into the greater Internet though NoaNet, a node of the
experimental Internet2. The other attraction is The Dalles Dam and its 1.8‑gigawatt
power station. The half-mile-long dam is a crucial source of cheap electrical
power – once essential to aluminum smelting, now a strategic resource in the
next phase in the digital revolution. Indeed, Google and other Silicon Valley
titans are looking to the Columbia River to supply ceaseless cycles of
electricity at about a fifth of what they would cost in the San Francisco Bay
Area. Why? To feed the ravenous appetite of a new breed of computer.
Moore's law has a corollary that bears the name of Gordon Bell, the legendary
engineer behind Digital Equipment's VAX line of advanced computers and now a
principal researcher at Microsoft. According to Bell's law, every decade a new
class of computer emerges from a hundredfold drop in the price of processing
power. As we approach a billionth of a cent per byte of storage, and pennies
per gigabit per second of bandwidth, what kind of machine labors to be born?
How will we feed it?
How will it be tamed?
And how soon will it, in its inevitable turn,
become a dinosaur?
One characteristic of this new machine is clear.
It arises from a world measured in the prefix giga, but its operating
environment is the petascale. We're all petaphiles now, plugged into a world of
petabytes, petaops, petaflops. Mouthing the prefix peta (signifying
numbers of the magnitude 10 to the 15th power, a million billion) and the Latin
verb petere (to search), we are doubly petacentric in our
peregrinations through the hypertrophic network cloud.
Just last century – you remember it well, across the chasm
of the crash – the PC was king. The mainframe was deposed and deceased. The
desktop was the data center. Larry Page and Sergey Brin were nonprofit googoos
babbling about searching their 150-gigabyte index of the Internet. When I
wanted to electrify crowds with my uncanny sense of futurity, I would talk
terascale (10 to the 12th power), describing a Web with an unimaginably
enormous total of 15 terabytes of content.
Yawn. Today Google rules a total database of
hundreds of petabytes, swelled every 24 hours by terabytes of Gmails, MySpace
pages, and dancing-doggy videos – a relentless march of daily deltas, each
larger than the whole Web of a decade ago. To make sense of it all, Page and
Brin – with Microsoft, Yahoo, and Barry "QVC" Diller's Ask.com hot on
their heels – are frantically taking the computer-on-a-chip and multiplying it,
in massively parallel arrays, into a computer-on-a-planet.
Excerpted
from the October 2006 issue of the Wired magazine. To read the complete
article, see: http://www.wired.com/wired/archive/14.10/cloudware.html.
|
Capturing impressive long-term gains,
Gilder’s tech portfolio is up 288% since the market low in
October 2002, compared to 106% for the NASDAQ and just 74% for the S&P
500. Year-to-date returns for Gilder’s “Telecosm Technologies”
companies continue to impress. Equinix is up 54%; Finisar is up 77%; Broadwing up 103% and EZchip is up 115%! Subscribe
Today: http://www.gildertech.com/ |
RFriday Feature
/ The Real Objective of Net “Neutrality” Regulation
The 10th Annual
Gilder/Forbes Telecosm Conference, held last week in Lake Tahoe, featured an
outstanding session titled “Broadband Brawl: A
Debate Over Net Neutrality” featuring:
Tod Cohen, VP and Deputy General Counsel, Government
Relations, eBay
George Gilder, Editor in Chief, Gilder Technology Report
Peter Huber, Senior Fellow, Manhattan Institute for Policy Research
Andy Kessler, Author and former hedge fund manager
Lawrence Lessig, Professor of Law, Stanford University
Paul McWilliams, Editor, NextInning Technology Research
Moderated By: Jeff Stambovsky
A video podcast of the debate is
available on:
http://www.discovery.org/scripts/viewDB/index.php?command=view&id=3760&program=DI%20Main%20Page%20-%20News&callingPage=discoMainPage
Hance Haney, http://www.disco-tech.org/
blog excerpt (10/09/06): My Theory is that the real objective of
net neutrality regulation is to protect Google, Yahoo, MSN and the other
Internet content providers from having to share online advertising revenue with
companies like AT&T and Verizon who deliver their content. Online
advertising generated $12.5 billion last year, and the content providers
captured all of it. That's not usually how it works when it comes to
newspapers, broadcasters and other media. Advertising usually supports both
content and delivery.
Last week a distinguished panel debated net neutrality regulation
at George Gilder's Telecosm
conference. The panel featured Stanford Law Professor Larry Lessig, Peter Huber
of the Manhattan Institute, eBay's vice president and deputy general counsel
for government relations and others. I asked the panel if anyone thought it
would be wrong if AT&T or Verizon were to hold an auction where Google,
Yahoo and MSN could bid for the right to feature their search bar on a portal
or a browser that AT&T or Verizon provide as a default setting to their
millions of customers? Assuming that it's illegal for Verizon and AT&T to
block or degrade acces to the others, is there anything wrong if Google wants
to pay each of the carriers a billion dollars to feature its search bar as the default
setting?
LESSIG: ... Totally fine ... it's exactly what we should be encouraging.
HUBER: ... If [net neutrality regulation favored by Wyden and other
supporters] becomes law, it's illegal. [AT&T and Verizon] are giving
preferential access to one advertiser ... it cannot be done.
Considering that Lessig supports net neutrality regulation and
Huber opposes it, I thought the responses were quite interesting.
The marketplace should allocate advertising revenue, in my opinion, not
lawmakers. A problem with most of the proposals for net neutrality regulation,
perhaps unbeknownst to many supporters, is they would make it illegal for
broadband providers to receive advertising revenues. In this sense, net
neutrality regulation is anti-consumer because it would deprive providers of
additional revenues which they could use to accelerate the build-out of their
networks and to lower the subscription fees their customers have to pay.
Check Haney’s complete blog post:
http://www.disco-tech.org/
|
The Gildertech Blog, http://blog.gildertech.com/ | Logon now to see what’s new. |
Friday Blogger Bonus / Infinera vs. EZchip
Gilder Tech. Report Subscriber (10/08/06): Is Infinera is a
ROADM company (reconfigurable optical add-drop multiplexer)?
George Gilder (10/0-/06): Infinera makes optoelectronic add-drop multiplexers, not ROADMs (reconfigurable optical add drop muxes). This means that in order to drop a stream of bits off a fiber line, the Infinera device must convert all the wavelengths on the line to electronic bits, including long haul wavelengths. Then it must scan their addresses, and convert the local bits to optical form to be sent by a laser into the local fiber network, where it then has to be converted to electronics again for local distribution. Infinera can now handle an amazing 40 wavelengths (lambdas) on chips by this optoelectronic method.
Unlike Infinera chips, ROADMs are all optical and can only drop lambdas, not particular digital bit streams, whether IP packets or Ethernet frames. So the all optical network requires wasting entire lambdas on particular bitstreams, however small. But the ROADM does not need to scan all the wavelengths because the wavelengths constitute their own addresses (their colors). The ROADM can be configured to drop particular lambdas as desired. It's reconfigurable and becomes more cost effective the more lambdas are available.
ROADMs
do not compete with network processors. If a particular wavelength contains
many bitstreams, they must eventually be converted to electronic form to be
distributed to their appropriate destinations by programmable devices from EZchip
(LNOP) or less flexible application-specific chips from Broadcom (BRCM),
Marvell (MRVL), Greenfield Networks, Cisco (CSCO), et al.
The
ultimate triumph of ROADMs and other all-optical equipment all ultimately
depend on the continued advance of wavelength division multiplexing (WDM)
beyond the present level of 40 to 80 lambdas or wavelengths (manageable by
Infinera's modules) to the thousands of wavelengths that can be handled by Essex
Corp’s (KEYW) Hyperfine equipment. (Chief Technologist Terry Turpin claims
that 14 thousand or more are not only possible but optimal on a single fiber.)
Infinera's success stems from the complete halt of new all-optical
installations and the collapse of the makers of this equipment. Even the Corvis
switches at the heart of the Broadwing (BWNG) network are no longer
manufactured.
Thus for the next build-out phase even Broadwing was forced to abandon its all-optical goal. The crash thus opened the way for Infinera optoelectronics. Though apparently losing ground to Infinera, JDSU (JDSU) is one of the few optical players who remain in this business and they have managed to sell 9 thousand ROADM modules based on planar lightwaves. Ironically these devices are being incorporated widely in the AT&T (T) network, which is running out of capacity before Broadwing's, which benefits from its Corvis all-optical switches. AT&T just revealed that its network is now dealing with some 7 petabytes of traffic per day, which translates into total Internet traffic of some 430 petabytes per month, up 22-fold since the crash.
The
Infinera solution cannot begin to work with thousands of wavelengths. That is
why they talk about 100 gig Ethernet and OC-768 and beyond. But until traffic
rises enough to force the creation of new all-optical networks, Infinera and
other optoelectronic are having their Indian summer. But the Infinera chips will
ultimately be relegated to various OEO applications on the edge as Essex and
other stealthy players develop the next generations of commercial all-optical
gear. That may be a considerable wait but it will happen before the end of the
decade.
To
read George’s complete response and more posts by GTR subscribers, logon with
your subscriber ID at http://www.gildertech.com/.
RELATED READING
Will EZchip
Momentum Be Reflected in LanOptics' Share Price?
http://chip.seekingalpha.com/article/18227
___________________________________________
Readings /
YouTube's
got a catchy hook, but I still prefer the classics
http://blogs.siliconvalley.com/gmsv/2006/10/youtubes_got_a_.html
Phelps: Dynamic
Capitalism
http://online.wsj.com/article/SB116043974857287568.html?mod=opinion_main_commentaries
Oscar,
Felix, and Dubya’s Deficits
http://www.nypost.com/php/pfriendly/print.php?url=http://www.nypost.com/seven/10132006/postopinion/opedcolumnists/oscar__felix__dubyas_deficits_opedcolumnists_john_podhoretz.htm
Microsoft
Eyes Another Chance To Be A TV Player
http://www.informationweek.com/news/showArticle.jhtml?articleID=193301220
Fix
Medicare, Not Its Prices
http://www.cato.org/pub_display.php?pub_id=6722
New
Battery Technology Promises More and Less
FDA:
Nanotech Gets Mixed Reviews
http://www.wired.com/news/wireservice/0,71929-0.html?tw=wn_technology_10
America,
300 Million Strong
http://www.cato.org/pub_display.php?pub_id=6729
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