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Michael Elling's Profile


Chairman/President
Information Velocity Partners, LLC
United States
Joined: Over 6 months
Last online: 11 hours ago
 
 
Michael Elling's Links
» IVP Capital
About Michael Elling
Change catalyst. Structured framework utilized to develop optimal approaches in the lower, middle and upper layers of the stack as well as vertically complete solutions.
Michael Elling's Posts
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Comments
" When you have a gig of access and very low latency, the slow, un-navigable, overpriced cable offering will have a tough time competing. Of course, we'll see this play out now in at least 3 markets in the US. The belief that that cable networks and programming costs don't follow moore's and metcalfe's law is wrong, wrong, wrong. In fact, with choice, pricing which reflects marginal cost, and a mobility, the consumer will explode their video consumption only not through the horribly unattractive and unwieldy cable interfaces. "I HATE MY SET-TOP BOX FROM TIME-WARNER!!!!!!!!!!!!" I say this easily 5-6 times a day. How's that for positive reinforcement of a trend? "
In First it was the end of history. Then the end of the the tablet. Now it's the end of television! 3 weeks ago by Michael Elling
" It's truly odd that few commentators have brought up the lack of a commercial offering, commercial VPN solutions for HD video, or wireless offload and backhaul. All of these could be layered on top of Google's investment and make it even more of a bonanza. In the new, horizontal world, there are few geographic, application or market distinctions known to layers 1-3. No one seems to care about Metcalfe's law (aka the network effect) or have an understanding of true marginal cost and demand potential of these networks. Very puzzling. "
In Google Fiber getting thumbs up in Kansas City: is Google on a roll? 3 weeks ago by Michael Elling
" It's quite wonderful that these vertically integrated monopolies are training their customers to seek horizontally scaled offload solutions. Quite wonderful indeed. The problem is that 802.11 is scaling much more rapidly and is about 1/10th the cost of 4G and soon 5G (yes we'll all be bubbling about it in 2-3 years as we short the stocks). It's also about the vertically integrated, inefficiently priced, service-provider coming up against the horizontally scaled competitive market solution. So to Moore's and Metcalfe's laws we can now add the Law of Wireless Gravity, which holds "a wireless bit will seek out fiber as quickly and cheaply as possible." http://bit.ly/ZRqwrG "
In Shock result: WiFi beats LTE user experience 1 month ago by Michael Elling
" Google is able to price its access because it has approached the market horizontally and figured out ways to drive marginal cost down a priori at every layer and boundary point. It's pricing reflects this and there is risk in terms of generating the demand but that's the beauty and simplicity of the pricing strategy. "
In Executive Insight: Why the bandwidth debate judders on 1 month ago by Michael Elling
" The "internet" was and is one big positive metcalfian suck for broadband. I use suck as opposed to pull, because it was and is more like a vacuum cleaner in pulling demand along from areas never before seen or perceived. Do people realize that the internet scaled in the US 10 years ahead of the rest of the world due to flat-rate dial-up? Do people realize that flat-rate dial-up was a monopoly pricing response by the Baby Bells to the competitive WAN/IXC threat of the 1980s? The Bells realized this after the fact and piggishly tried to get in the way after making money selling second lines which cost them practically nothing to provision and ballooned their profits!!! Do people realize that Baby Bell and cable broadband of the 2000s did not get "sold" by those vertically integrated carriers so much as it got "bought" by end-users who wanted faster access to the better things the "internet" was generating every day? That's a "core-driven" demand-pull model if ever there was one. The "people" I am referring to are on both sides in the debate, because both have apparently not learned from history. The internet was and is one big "metcalfian" suck along for broadband and the ISPs (funny they don't provide any internet service, so we should stop calling them that, instead call them Access SPs ASPs) shouldn't be arguing for 2-sided settlements especially as they make 60-90% margins for a sub-optimally priced service. If anything it shows that all vertically integrated monopolies are good at is "edge-side" constraints and barriers to generativity and commerce. However, an interesting dynamic is developing which undermines Felten's logic (and that of the large, true, internet service providers like Google, Ebay, Amazon, et al that provide inter- or exchange services) at the same time. If pricing (including pricing of transaction fees) reflects marginal costs, which is the case in the competitive, horizontal information and data networks, then in fact, a "balanced settlement system" is conducive to infrastructure investment and new service creation and centralized subsidization and procurement. All of these support and further stimulate the core-driven model while ensuring the edge supply gets pulled along. In fact there's no reason that once balanced settlement models scale in the middle layers (and they are already present in numerous ways) there won't be a virtuous push/pull dynamic that never ends. Bill and keep on the other hand (the legacy from a private network mentality of the data networking world) is actually a brake on new service creation and new entrants and is the kiss of death for infrastructure investment and centralized procurement. We've been witnessing this over the past 10 years, after 2 decades of relatively open access in the lower, middle and upper layers of the stack in the 1980s and 1990s. We need to get back to these principles and merge the better elements of both approaches. After all, even after 30 years we are still in the very early stages in this information revolution. "
In Countering the tedious anti-Internet rhetoric 2 months ago by Michael Elling
" Carriers still have a long way to go to think horizontally. Hopefully they price at a wholesale rate that reflects the marginal cost savings of this combined/shared approach. "
In Vodafone and Orange to share fibre-to-the-home network in Spain 3 months ago by Michael Elling
" The vertically integrated carriers are on a sinking ship in a horizontal sea. Carriers are worse than silo'd applications (FaceBook) or ecosystems (Apple). Their (rapidly depreciating) investments at every layer and vertical boundary point simply do not scale across rapidly changing and growing demand. "
In If Joyn goes OTT will we see the IMS-less mobile network? 3 months ago by Michael Elling
" This industry seriously has to go horizontal. A bunch of vertically integrated dinosaurs whose pricing is 20-150x out of whack with reality. "
In Barcelona bunfight between mobile operator CEOs turns out to be a bit under-baked 3 months ago by Michael Elling
" The value of wifi was in the power controls that enabled infinite reuse nano-cellularization if you will. This is the sort of benign government oversight/intervention, along with equal access, that should be applied to all layers not just the transport and access layers, but the control and settlement layers, and even to some degree supervision of market power in the upper layers. Regulators need a business model driven, horizontal framework that can be used understand rapidly obsoleting supply and transformative, growing and diverging demand. "
In FCC moves to bulk up US WiFi spectrum 3 months ago by Michael Elling
" It's unfortunate that the regulators see the wireless and commercial markets as distinct from the residential markets. It is clear that the same demand via the smartphone interface and tablet transcends all three. But more importantly, the commercial (via VPN and advertising and commerce) and wireless (via offload)could be used to pay for, subsidize or amortize the cost of broadband to the home. It is of even greater import for rural, not just for network economies, but also because suburban/urban demand can actually pay for rural networks directly via a competitive horizontal model with balanced settlements. The structural separationists, for their part, have failed to develop a truly horizontal model that would illustrate the type of supply/demand dynamic that would enable rapidly obsoleting supply to be cleared by more rapidly growing and evolving demand. We have competitive models that have succeeded along these lines in the competitive WAN in the US in the 1980s-1990s, the internet and competitive digital wireless networks. "
In Executive Insight: Why the UK's rural broadband initiative has failed 3 months ago by Michael Elling
" Skype is lumping voice and video together. Telcos are voice only. Also, skype generates a lot of off-net international traffic as well. This is the reason MSFT should go for broke and disrupt the telcos. They represent less than 10% of revenue spend, and in many instances can't eschew MSFT products. Yet the Telcos are a 100% break on theirs, Nokia's and the ICT sector's growth in general. "
In Skype claims bulk of international calling growth 3 months ago by Michael Elling
" PBX' developed because vertically integrated analog monopolies could only price and invest in technology based on the average user, not the marginal (high volume or commercial user). So high volume commercial users fled the public networks, thereby raising the cost for those who remained. The opposite of the network effect or metcalfe's law. Very few if anyone talks about this today. That's why it's a fallacy to believe that networks are high fixed cost and therefore high average cost. On the contrary their pricing should reflect marginal cost to effectively clear rapidly changing and growing demand across rapidly depreciating supply. We observed 3 forms of price/demand elasticity during the 3 waves of digitization in the 1980s-90s (WAN, data, wireless): 1) shift from private back to public, 2) normal price elasticity, and 3) application elasticity as 3rd parties were able to take advantage of the low connection costs and create entirely new demand horizons. Even as pricing/costs dropped 99% in each instance, revenues continued to grow 10-25% each year over decade as demand exploded. Ahhh the good old days! "
In Small cells to take on PBX role 3 months ago by Michael Elling
" Wishful thinking on the part of GE if the lower and middle layers of the stack aren't better addressed and opened. All digital booms have resulted from three things: shift from private back to public elasticity, normal price elasticity and application elasticity. GE's focus on the latter and lack of scaling private (VPN) apps/nets onto public infrastructure will limit the upside. All the public nets are built on overpriced protocol stacks as a result of vertically integrated monopoly/duopoly carrier and vendor structures. "
In Billions of devices and then trillions of dollars: it's the 'Industrial Internet' 6 months ago by Michael Elling
" The other element of this issue is price. 3G failed to develop in rural markets in the 2000s because of all you can eat voice plans developed in the late 1990s. Data caps and roaming agreements will be a boon for 4G infrastructure in rural markets. The urban/suburban transient user effectively doubles the indigenous rural mobile market. "
In The biter bit. Blood in the water as US appeals court snaps back at Verizon 6 months ago by Michael Elling
" After 15 years of competitive expansion, the telecoms industry is in relative decline as a result of remonopolization. As long as carriers remain vertically integrated and increasingly trend towards a bill and keep settlement system the telecom landscape will not develop rapidly and efficiently amortize highly variable supply and demand. It behooves AlcaLu to show the carriers how to re-orient horizontally. "
In Executive Insight: Shedding the invisibility cloak 6 months ago by Michael Elling
" Looks like a horizontal operating model is what is necessary to deal with rapid growth and technological change as well as NIMBY and other carriage restrictions/issues. Why can't people just agree that the vertically integrated carrier model is a dinosaur and not able to keep pace with the horizontal internet/datacomms model? "
In Is network-sharing a prerequisite for the small cell approach? Over 6 months by Michael Elling
" That would require marketing intelligence and a willingness to take risks both of which are in short supply at vertically integrated telecom carriers. "
In Carriers should customize Android phones, says Google Ventures exec Over 6 months by Michael Elling
" The current carrier model of one number equals one device is limiting. I'd like to have a minimum of 5 different devices all tied to the same telephone number and user address and use them based on the context. So if I am out sightseeing, this particular device would be optimal as opposed to carrying both my smartphone and a higher end, more robust camera. Of course the devices need to be context aware, so they are not always all ringing at once. Is it Samsung or the carriers and infrastructure vendors (and the author) that are constrained in their thinking? "
In Forget cameraphones, Samsung is now producing phonecameras Over 6 months by Michael Elling
" Both arguments are flawed, because they fail to account for how the internet originated and developed. The flat rate dial-up pricing model in the US in the mid to late 1980s was a direct result of "horizontalization" and competition of the WAN. This reactive pricing model on the part of the vertically integrated monopolies along with the bill and keep of the relatively narrowband, store and forward packet/internet world of the late 1980s/early 1990s fostered the notion of "free". The reality today is that nothing is free and the bill and keep model of the internet is not sustainable, nor is the overpriced vertically integrated telecom model. To foster new service creation and relate layer 7 to layer 1 a balanced settlement system needs to evolve most likely out of a series or horizontally oriented "exchange" models that efficiently and effectively "clear" traffic and provide incentives for new service creation and infrastructure investment. The result will be rapid network effects and recoupment of rapidly obsoleting technology at every layer of the stack. The vertically integrated telcos are fighting a losing battled in yesterday's war, while the current internet players are resisting an inevitable future because bill and keep suits their own monopolistic tendencies and blocks new entrants. "
In Why a 'sender pays' Internet would be utterly wrong Over 6 months by Michael Elling
" Bill and keep stifles new service creation and keeps new entrants out. What is required is a balanced settlement solution that facilitates bilateral compensation. Price/cost transfer is the best clearing mechanism for both Network A and Network B to simultaneously invest in new services for the benefit of their customers and achieve (metcalfe/network) scale rapidly. Only then can investment be rapidly amortized. The current model is fundamentally broken on the telco side, while the internet side continues to plod along with a (narrow)bandwidth bottleneck slowing it down. "
In US delegation prepares to play Whack-a-Mole at ITU meet Over 6 months by Michael Elling
" A lot of this debate is flawed from both perspectives. The telcos had/have 800, VPN, prepaid all of which is receiver pays. Wireless in the US is receiver pays. There is a reason and need for balanced settlement solutions that are not set by regulations but rather by bilateral exchange or agreement. Without balanced settlements including both called and calling party pays depending on the context, new service creation is stifled. Let's say you are Network A and Network B doesn't upgrade their facilities. What economic incentive do they have. That's the principal reason we don't have 3G in rural markets along with the all you can eat urban plans. Further, bill and keep is the best mechanism for keeping new entrants out which is why the big internet companies now support it. Lastly, the one silver lining could be big data. Big data "clears or covers" the cost of the communications session through the commercial transaction. But it is far from complete in providing top to bottom clearing and bilateral (between network) clearing. "
In Settlement-free peering: why the Internet prospers because of, not despite, it Over 6 months by Michael Elling
" The problem with this work and the opposing sides in the ITU debate is that we are comparing apples and oranges. On the one hand is the vertically integrated, government sustained monopoly communications model that is rife with inefficient subsidy and priced to reflect average costs. On the other is the horizontally layered, competitive service model born mostly out of large-scale private intranets where pricing reflects (rapidly declining) marginal costs. The result is plenty of irony, hypocrisy and paradox to go around past, present and future. "
In US delegation prepares to play Whack-a-Mole at ITU meet Over 6 months by Michael Elling
" The problem with this work and the opposing sides in the ITU debate is that we are comparing apples and oranges. On the one hand is the vertically integrated, government sustained monopoly communications model that is rife with inefficient subsidy and priced to reflect average costs. On the other is the horizontally layered, competitive service model born mostly out of large-scale private intranets where pricing reflects (rapidly declining) marginal costs. The result is plenty of irony, hypocrisy and paradox to go around past, present and future. "
In Internet works just fine... hands off! Over 6 months by Michael Elling
" 1) Agree with Francis. It's the cloud, stupid. 2) Being late to the game, Nokia, more than other vendor should provide ways for iOS and Droid users to easily transition to Windowsphone 3) #2 makes it easy to have Droid models simultaneously to offer best of all worlds, and 4) rethink the entire approach to smartphones, by segmenting the market into 5 elements: Nitro (entry level devices) Oxy (every person's smartphone) Krypto (super user) Io (utility user and rugged) Act (sport) "
In Calling all Nokia knockers: what would YOU do? Over 6 months by Michael Elling
" Carriers get to double bill when on their datapipe and at least get some revenue benefit with offload and save on the capex (however small) and interconnect. But it could well be letting the fox into the henhouse on several fronts. "
In Skype on the telco bill: turkeys voting for Christmas? Over 6 months by Michael Elling
" It's funny to listen to monopoly thinking in action. There is absolutely no reason Google can't scale its model into lower demographic zones. First, of course, it will go for easier win areas to achieve last mile scale, as it already has significant parity across the mid-mile and WAN. It hasn't even begun to talk about enterprise, SMB and SOHO. Why not? because then it will really begin to scale. And lastly, as there is a bandwidth war, Google will turn on its advertising and subsidizing model and provide "free" or highly subsidized last mile access to lower demographic zones. Let's not forget the potential for high capacity wireless and mobile (droid) that it can achieve with second tier carriers to drive low-cost high capacity access to lower income zones. The author of this article should consider some of these issues before positing a monopoly-like outcome. "
In Google Fiber could actually widen digital divide in Kansas City Over 6 months by Michael Elling
" 2 things to contemplate: a reason for flat-panels (reasonably large) in every room. Also, what could the potential bandwidth costs/demands be if this were implemented in a mobile/transient environment. "
In Ambient Video: Skype says some users are adopting the 24/7 call Over 6 months by Michael Elling
" Gosh, cause it requires some more steps and it is slow and it is less frequently used than a PC where one has a keyboard and mouse to input quickly, response times are faster, and the screen is much bigger to make visual capture and scrolling that much faster. In the words of Homer Simpson, "D'oh!" "
In Search isn't as popular on mobile as online Over 6 months by Michael Elling
" Goes to show how fundamentally different the usage, revenue and cost structures of US and European carriers are. The roaming concept is just one example. But the difference between voice and text pricing and who pays is also a big deal. Many have criticized the US pricing model, but Europe may well have to accept it. "
In OTT: The monster under the bed Over 6 months by Michael Elling
" If there weren't so many jokes about lawyers in hell, this one might actually be worth a laugh. "
In Trademark madness: the GSMA gets an annoying letter Over 6 months by Michael Elling
" It's both moore's and metcalfe's laws, as the total number of connections drives traffic/consumption more broadly and uniformly. My estimation is that it double's moore's law. So bandwidth pricing should drop 50% every year. Unfortunately bandwidth pricing in the mid and last mile disconnected from moore's and metcalfe's laws about 10 years ago in the US. Otherwise bandwidth should be 20-150x cheaper. The difference between 10% and 50% declines over 10 years is huge. "
In Internet traffic costs plummet Over 6 months by Michael Elling
" Competitive markets that have fostered digitization of networks and services have typically resulted in 3 forms of demand elasticity: a) a shift back from private to public networks b) normal demand/price elasticity and c) application elasticity. The ovum report speaks to the latter very clearly. But we have seen it in the digitization of the WAN (1980s), data (aka the internet) (early to mid 1990s) and wireless (mid to late 1990s). "
In Partnering key to healthy wholesale Over 6 months by Michael Elling
" After spending so much money on consultants, lawyers and analysts, has any one mentioned marginal cost and scaling investment? The British govt would do well to consider an open access horizontal model that focused on competitive and efficient heterogeneous transport/access networks that supported multiple control and application layer participants to stimulate demand. Telecom markets around the world need pricing that reflects marginal cost and rapid technological change. The vertically integrated carriers cannot price for effective capacity utilization. "
In UK's rural broadband programme bogged down by mud imported, duty free, from Brussels Over 6 months by Michael Elling
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