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My relationship with Google News has always run hot and cold. No make that cold and tepid. From the very beginning of Google News as an experiment back in 2001, they refused to index my work, which they said was my fault, not theirs (“they” being an algorithm attached to an e-mail box, of course). But new evidence has recently come to light suggesting to me that Google News has an actual blacklist.

For those not familiar with the expression, “blacklist” usually refers to Hollywood screen and television writers from the 1950’s McCarthy era who were thought to be communist sympathizers and were banned from working openly in the entertainment industry as a result. Not Hollywood’s finest hour.  My suspicion is that Google News has a similar list of writers it would prefer did not exist and these people (including me) are systematically excluded from having their work indexed and publicized.

Despite having given Google some of its earliest publicity in the form of the company’s first-ever TV interviews back in 1998, I’m told by friends inside the Googleplex that I have enemies in high places there, which I find flattering.

Google’s excuse for excluding me has always been that I am a sole proprietor of this operation and therefore what I produce doesn’t qualify as news. Tell that to the hundreds of companies I’ve been the first to find, the dozens of big stories I have been the first (and sometimes ONLY) reporter to cover, including a bunch of big stories about Google.

Nothing personal, it’s just the algorithm, they say.

We’re not evil, we’re just programmed that way.

Yeah, right.

When I was at PBS I pointed out to Google News that my URL was pbs.org/cringely, so I was really part of a larger operation that included news sources Google was indexing. If they indexed the NewsHour, I argued, then they had to index me. And so they eventually did — for a few weeks at a time. But I’d inevitably fall off the Google index again while some other bozo, often with a tenth or fewer readers than me, would stay on.

When I wasn’t being indexed by Google (which remains the case today) the only way my work would appear in Google News was when some other writer would cite me, which fortunately happens most weeks. Still, such second generation coverage doesn’t bring me any real traffic, I’m pretty sure.

Here’s how it would go down.  I’d fall off Google News, a PBS lawyer would write to Google and I’d eventually be back on for a few days until it started all over again. The times I wasn’t indexed lasted for weeks. And when I left PBS and arrived here, well that was it. Now I really was a one-man band.

So I was very excited a couple months ago when I began writing for AOL’s Housingwatch.com site, where I currently file 1-2 pieces per week on real estate and mortgages (here’s the short version: the mortgage industry is screwed, film at 11). With something like 30 professional writers working at Housingwatch alone, I knew Google would have no choice but to index my work.

Nope, I guessed wrong.

To my surprise it looks like none of the coverage at Housingwatch or its parent AOL is being indexed at all, which is stupid considering AOL serves 15+ million readers per day.

A week ago I wrote a short piece for Housingwatch that was picked-up by the AOL home page and given prominent play. As a result it got more than 750 reader comments over one weekend — a huge number.

If you want to figure how many people read a column from the number of comments, try multiplying by at least 1000. My posts here tend to average over 100 comments, which is pretty good.  But 750 comments, that’s spectacular.

Yet when that particular AOL column was burning-up the Internet I saw nothing about it on Google News. It was invisible.

How could that be? Most of the top stories on Google News weren’t getting 750,000+ readers, I was sure, yet they were being indexed.

My theory, then, is that both AOL and I are blacklisted from Google News.  That’s hundreds of  professional writers… invisible.

AOL is in many ways a Google competitor, I suppose. Certainly it is run by an ex-Googler, who probably left behind bad feelings.  But, if true, how fair is this on Google’s part? Not very. I don’t suppose it qualifies as evil, but it is definitely petty and in no way serves Google users, who should be appalled.

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Today is a great day for I, Cringely and for me. It is the day we launch the special web site for Cringely’s (NOT in Silicon Valley) Startup Tour. I wrote a column last month announcing the Tour, which you can read here, but today marks the actual start of this summer’s adventure, because it opens nominations.

Visit the new web site here, but please remember to come back and finish reading this column.

This new web site is strictly for readers to nominate startup companies, discuss them, vote for favorites, then see the results as we come up with the top 24 companies in six different categories.

You have to register in order to nominate or vote, though not to just read.  Many people won’t have to register if they login with their Facebook or Twitter IDs. Registration is important because that’s how we keep people from stuffing our ballot box. That’s the only reason we have registration. I won’t sell your name to anyone, I promise.

Notice that the site (unlike this one you are reading right now) doesn’t even have ads. I want to keep the new site completely transparent and above-board, because I think this might be one of the most important things I ever do in my career so I want to do it right.

As I am writing this, the new site stands empty. There are no nominated companies. That’s your job, not mine. So here is how to do your job. Click on the nomination form and fill it in for any startup company that you think is doing exciting work and deserves recognition. The very act of being considered and discussed by 500,000 readers will give these companies more publicity than most of them would otherwise ever get.  So in this case it is an honor just to be nominated. But having said that, please only nominate really good companies that actually qualify.

After my first column about the Tour I received e-mail from many startups wanting to be considered and one of those was Facebook. I have nothing against Facebook, but I hardly think it qualifies for this project. If the company you are pushing has zillions in the bank and more than, say, 50 employees, it is too darned big. No Facebooks.

Beyond that it is okay to nominate companies that have been around for awhile. It is okay to nominate your own company. This isn’t frigging Wikipedia.

You can add all kinds of supporting information to the nomination including documents and even videos for voters to consider. And remember that not only the nominator can submit such materials, any registered user of the site can do so. This requires registration because there are as my Mom, Mrs. Cringely, would say, assholes out there who will submit all sorts of useless or disruptive crap. This new site is a No-Asshole Zone, so let me know if you come across any nonsense and I’ll take the garbage out myself.

This is an ongoing process that will take at least eight weeks to find our 24 companies. Keep coming back to see the new companies that have been nominated and to discuss them and vote. While the winners won’t be final until the very end, I’ll make sure you have some sense of the deliberations as they go along, so come back for that, too.

Just to recap what I announced last month, my family and I will this summer saddle-up our 1996 Winnebago motor home to visit all 24 finalists, taking with us a TV camera crew. We’ll spend two days at every company, camped in the parking lot or in the CEO’s driveway. Two days is how long it usually takes for my kids to use up all the water and demand a trip to Redbox for new videos.

In addition to two months of ongoing text, audio, and video coverage right here, the 24 finalists will appear in my 12-hour reality TV series which will be on a BIG cable channel, one you have actually heard of that does not include the word “shopping” in its name.

I am also looking for a few good experts to consult on this project and for the TV series. That’s because I want to do more than just publicize the work of these new companies, I want to help them. So if you have been a successful startup CEO, CFO, CTO — anything with a C at the front — and are willing to share a bit of your expertise, please let me know. Experts on startup financing, including venture capitalists and angels, are especially encouraged to apply (bring money — preferably small bills with non-sequential serial numbers).

Some of these experts will come with me to the companies, some will appear only on video, depending on the time they can give to the project.

Not all experts will be accepted. This is my project and I’ll be the one to decide if you get to play or not. Frankly there are plenty of people out there who know a lot but have a hard time being helpful. We’re here to encourage. If any company made the top 24, they are already successful. We aren’t here to tell them how dumb they are and how smart we are.

All decisions are final.

Finally, I want to thank the Ewing Marion Kauffman Foundation of Kansas City for their support for this project, which they jumped on within minutes of hearing about it. Kauffman is the foundation of entrepreneurism and that’s what this startup tour is all about — helping to make America even greater.

But Kauffman and I can’t do it all by ourselves, so if your organization wants to become involved please get in touch with me because I’d like to make this tour an annual event and to help technology startups become as important to television as Survivor or The Apprentice.

Go to the new site and register now.

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Back to my 2010 predictions, this time mainly about Apple, the PC company that fared best in 2009 and is likely to fare best in 2010, too. Though I also wonder at what point we take Apple’s hint and stop thinking of them so much as a computer company?

Over the past years Apple has brought out successively better and ever more solid versions of OS X. They’ve completed a transition from PowerPC to Intel processors that could have killed a lesser company. They’ve built a dominant line of professional apps and a competitive line of productivity apps, pricing them reasonably compared to Microsoft. They re-invented the media player and the smart phone. They revolutionized the record business. And having once vilified the very idea of Apple stores, they changed their minds and showed the world how stores ought to be run. The company is absolutely at the top of its game despite a CEO who was absent for months near death. How do you top that?

In 2010 you do so by entering new markets and turning on old friends, sometimes simultaneously. That’s likely to be the case with the coming iSlate tablet, or whatever it will be called, which definitely won’t be running exclusively on AT&T. You can see that from AT&T’s sudden embrace of Android, which never would have happened if Steve Jobs hadn’t first made a preemptive move of his own for the iSlate, probably to Verizon.  The Apple/AT&T marriage is now one of convenience only.

The iSlate (or whatever) will be Steve’s idea of a new category of computing, or at least that’s the way he’ll spin it. Not an ebook reader, not a tablet computer, not a pen computer, not a handheld, not a smart phone, the iSlate will be something else and I’d say that something will depend on: a) the content deals Apple can announce, and; b) whatever Steve decides to claim for the product, whether actually true or not.

So expect lots of print deals for newspapers, magazines, and books. Expect, too, audio and video deals for the iSlate. Expect some major UI gimmick too, because that’s always at the heart of one of these advances. “It isn’t an MP3 player! It’s an AAC player with this tuning wheel thingee!! ” See what I mean?

Apple will under-promise and over-deliver for the iSlate. And if for some reason they don’t, then they’ll just declare it to be a hobby, like the AppleTV.

Apple as a content company will move into subscription music based on its recent Lala Media acquisition, but don’t think this embracing of streaming means Apple will be abandoning downloads, no sirree. Remember that while Hulu, for example, has been making a lot of news delivering streamed TV and movies, Apple has been making a lot of profit downloading both for sale and rental.

The downloading-streaming-downloading pendulum is about to turn direction, I think, with the advent of true 1080p video on the net. Years ago no network was fast enough for high fidelity streaming audio, much less streaming video, so everything was downloaded. Then networks got faster and people streamed. Then video came along (and Bit Torrent) and people downloaded again. That’s when iTunes rose to power for those of us who actually pay our bills. Then YouTube made streaming again popular. But now 1080p files are just so darned big that downloading is, again, where it’s at.

So what does that say about Apple’s vaunted rejection of Blu-Ray disks? I’ve maintained in the past that Apple refused to offer Blu-Ray as part of its agenda to take control of downloadable HD video standards. and I think I was right. But here’s news: Apple’s new line of iMacs were supposed to ship with Blu-Ray drives, but didn’t. What gives with that? Maybe it was a technical glitch, maybe a last minute pricing problem, maybe Steve didn’t get enough blood or flesh from some corporate partner (Sony). But I think it means that the fight over HD was won by Apple to the extent that they feel they can start listening again to their professional customers from the video industry who have been screaming for Blu-Ray.

So look for Blu-Ray drives to start appearing, shortly, in Apple computers along with Blu-Ray support in all of Apple’s professional applications. Look also for Apple to offer some higher level of HD download, probably with expanded device portability courtesy of Disney’s new KeyChest technology, which I am sure came from Apple.

And then there’s the iPhone. The iSlate will be a bigger iPhone, but in 2010 we’ll surely see at least two next-gen iPhones, too — a smaller form factor in the Nano tradition and a 1 GHz processor on something like the current model. Apple will remain atop the smart phone market, where Android may eventually threaten, but not yet.  As we see from the first Nexus One reviews, Google has a lot to learn.

More about Google and the Nexus One tomorrow, as well as an interesting theory about Apple and Nokia.

If you care about real estate, politics, or economics, you might find interesting this pair of posts I made this week on AOL’s Housingwatch blog:

http://www.housingwatch.com/2009/12/28/fannie-and-freddie-more-than-politics-as-usual/

http://www.housingwatch.com/2009/12/30/fannie-freddie-ii-the-wrath-of-obama/

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Judging from the 70+ reader comments, many from present or former IBM employees, my last column about the arrest of IBM Sr. VP Bob Moffat on insider trading charges hit a nerve.  In a few hours I’ll be posting another column on a completely different topic, but I can’t let this one go without making one more observation.  It has been almost a week since Moffat was arrested and in that time, as far as I can tell, IBM has made no comment on the case to the press or even to its own employees.

Why no comment?  I’ve been wondering that aloud for the last day or two, asking my friends and almost anyone I meet why IBM would be so foolish not to at least issue a press release on the arrest?  After all, the company supposedly cooperated with the SEC investigation.  They should have known the arrest was coming.  Why weren’t they ready with at least some statement reaffirming corporate values or possibly distancing themselves from Moffat?

Doesn’t IBM management owe that to its 398,000 employees?

They removed Moffat’s bio from the IBM web site, but that’s all.

Lack of comment suggests Big Blue doesn’t know what to say.  Perhaps the company is paralyzed. Maybe there is disagreement in the executive ranks about how to handle the problem.  Maybe Moffat, himself, was the guy who would have helped craft any response but now he’s unavailable.  Beats me.

But it doesn’t smell good.

My Mom, who is 85 and, like me, doesn’t own any IBM shares, may have put it to me the best.

“My guess is that this isn’t over,” she predicted.  “IBM could declare him innocent until proven guilty or they could write him off, but the fact they have said nothing at all means there are probably more shoes to fall. They could announce an investigation to ferret out others who made the same mistakes, whether those others exist or not.  And that’s what they would have done, had all the remaining guilt lay below Moffat’s level. But it probably doesn’t. I’d look upstream.”

Mom is a clever girl.

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I have no idea whether IBM senior vice-president Bob Moffat is guilty of insider trading or not, though that’s what he was arrested for yesterday.  What I do know is that Moffat’s job since 2005 has been as the architect of IBM’s project called LEAN, which is intended to adjust Big Blue’s global labor force to maximize profitability. I’ve written quite a bit about LEAN, much to the consternation of IBM, characterizing it in large part as a way to replace expensive older American workers with younger and cheaper workers in India and Argentina while cleverly dodging U.S. age discrimination and possibly other civil rights laws.  Whatever the legality of LEAN it is downright mean and shows little respect for the people who made IBM what it is today.

What does it say, then, when the architect of LEAN is arrested for alleged insider trading?

The good news, I guess, is that he was caught. The rest of the news is bad.  If Moffat is guilty as charged then it shows serious ethical and moral lapses at the very top of IBM (Moffat has been mentioned as a possible successor to IBM CEO Sam Palmisano). Even if he is proved innocent Moffat is still guilty of poor judgment in his choice of friends and of being a blabbermouth.  Since Moffat is being charged, in part, with insider trading of IBM’s own shares, then LEAN itself should probably come under some scrutiny as a possible tool for generating insider profits.

Worst of all, this might well turn out to be yet another example of parasitic management using the power of the corporation entirely for self-enrichment.  There is no insider tide that raises all boats.  There is no insider trickling down, except perhaps in the manner of honor among thieves.  Moffat and his gardener may have benefitted, the latter by getting to mow twice per week instead of once, but the rest of us — and certainly the 398,000 other people who work at IBM — are no better off for his alleged actions.

So Moffat is guilty or he’s stupid, neither of which says much for IBM.

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Last time I wrote about the business and technical context into which Apple would be bringing its long-rumored tablet computer, which many of us now believe will also be some form of e-reader. That column stimulated a lot of lively comments, thanks, but now I have to put up or shut up, giving my thoughts on both the still-secret Apple device and the possible content strategy behind it.

I think we’re all fairly sure at this point that Apple will shortly release such a device and that it will be nominally based on the iPhone or iPod Touch.  This is key because of the App Store and iPod ecosystems it will leverage.  Anything that runs on an iPod Touch will run on the tablet.

Since the tablet is also an e-reader, it has to have both a larger screen and greater battery life so users have a hope of making it all the way to the train platform scene in Anna Karenina.  Readers are probably correct, then, that the new Apple will have an e-ink display or equivalent. Current players in this very limited space are e-ink, SiPix, and Kent Displays, so Apple is likely to go with one of those.

But an e-ink display and the iPod Touch (or iPhone) app and content libraries are not enough.  Apple has to have unique content for the new device, which is why Cupertino has been talking to traditional publishers and those publishers have been blabbing to each other.

Publishers want to make money.  They want to be paid for their content.  They may also want to show ads.  Most importantly, though, they want a change of platform such that they can reassert control over their intellectual property, which has been for the most part subverted by the Web.  The easiest way to do this is through a new file format combined with a new category of content.  A tablet edition of the New York Times, for example, would ideally not be easily readable on other devices without paying something to the Times.  This is not to say it would be impossible to read the Tablet Times on your Windows PC, but not without first buying the content file.  And while viewing on a Windows PC is probably inevitable, don’t expect to read that same file on a Zune, ever.

One interesting way around this problem of getting paid while still reaching for a true mass audience would be to make certain content features usable only with the e-reader.  So the basic story might be readable on most any notebook or mobile phone, but to see the accompanying video would require the paid version.  This is just a thought, not a prediction.

The best user experience with this new content type would be using the iTablet, which would be supremely portable, silent, power-efficient and easy to read.  Bigger and with longer battery life than an iPhone or an iPod Touch, the tablet would be ideal for reading on a train or plane, in the car, during lunch — anywhere you’d read a magazine or book. Heck, hasn’t that always supposed to have been the idea behind an e-reader?

The content has to be somehow better than what can be read on a Kindle.  That’s made easy almost out-of-the-box given the iPod Touch software base.  Here’s the potential for content that actually does something.  I think that’s key.  For this device to succeed it has to have a large volume of content that simply does more than you’d generally expect on other platforms.  Otherwise why buy the reader?

As I wrote last time I have no inside knowledge of Apple’s plans.  But I know Apple as well as anyone and I do have one bit of insight.  Two years ago, while shooting interviews at e-ink in Cambridge Massachusetts, we saw what was probably the first demonstration of an e-ink display that was in color and supported full motion video.  I am absolutely convinced that display or its equivalent will be at the heart of the new Apple tablet.

Kindle is black and white.  Apple is color.  Kindle is static.  Apple offers animation and video, along with an LED backlight to make colors pop if the lighting is right.  Kindle is filled with books, magazines, and newspapers.  Apple is filled with books, too, but some of them will be like books in Harry Potter, with animation built into the pages.  Apple magazines and newspapers will include animation and video for a new kind of composite publishing format that will be Apple-protected and mainly for sale even if some ads are included. And the Apple device will play music, videos and movies, too.  Why not?

It won’t be cheap, not at first, because it doesn’t have to be.  I’d look for an introductory price in the $499-699 range for the first million or so units after which the price will start to fall.  Content will definitely be available by WiFi, but there’s also the possibility of a Kindle-like cellular connection that could be used by Apple to subvert AT&T’s network exclusivity on the iPhone.  This new device will be, after all, a new device, and not necessarily subject to the AT&T exclusive.  If there are cellular and non-cellular versions, then the iPhone/Touch analogy is complete.

Questions that remain concern how Apple will defend its new franchise and how the company will be paid for content. Many readers have yearned for a micropayment scheme as the cure for the common newspaper. As a guy who lives by writing I yearn for that, too, but I don’t see it coming, at least not in a form dramatically different from what Apple already has working with iTunes.  Sure it is attractive to make (or spend) a penny here and a penny there, but iTunes has already taken most of the friction out of purchasing content, both through one-click buying and (this is vital yet ignored by most pundits) the role of iTunes gift cards to bring online purchasing to tweens.  iTunes is an enormous money machine that will be extended to cover as many new types of content as Apple can think of.

How to protect the franchise is a little more complex.  Apple will look for exclusive deals wherever it can – exclusives with publishers as well as technology suppliers.  The publisher deals are easy since this new content won’t generally play on other mobile devices, though I’m sure you’ll be able to read it all on any iPhone or iPod Touch so Apple can claim an ab initio installed base in the tens of millions of units. I’d expect Apple also to try for a display exclusive of some sort, possibly even acquiring e-ink, which is in the process right now of being acquired by a Taiwanese LCD vendor called PVI.

This e-ink/PVI deal is especially interesting because it was announced back in June as an all-cash deal for $215 million then revised earlier this month throwing-in 120 million preferred PVI shares for the former e-ink investors.  This is a huge about-face that instantly doubles the price of the purchase while also giving the former e-ink owners a share in any upside for the business — an upside they obviously expect to enjoy or they wouldn’t have held out for it.

E-ink had, over the years, raised $150 million, so while the investors were being made whole by the original $215 million sale price, their upside wasn’t much.  But then the electronic ink business, for all its apparent potential, hasn’t really been that good despite e-ink’s use in both the Sony and Amazon Kindle readers. Four months ago the e-ink investors were thrilled to just get their money back.  Then something changed.  They just demanded (and got) twice as much money in the form of preferred shares giving them a significant piece of any upside explosion — an explosion they clearly didn’t expect when the original cash deal was negotiated.

The something that happened I believe was Apple’s entry into this market segment. That alone may have been enough.  I’m guessing Apple, like it did with Samsung and Flash RAM, made a huge commitment for most — maybe all — of e-ink’s color display production for years to come.  Or maybe PVI is simply flipping e-ink to Apple.  Only time will tell, but I know in my bones that there is something going on here.

Chances are that Apple’s tablet won’t revolutionize publishing, but for Cupertino it will accomplish more than enough to be a success if it extends the iPhone and iTunes user bases, crushes the AT&T exclusive, and pushes Amazon and Sony to second and third places in the e-reader category. For Steve Jobs the goal is always to change the world, but if that can’t be done then making money and beating the crap out of competitors is almost as good.

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Network neutrality came from the telephone business.  With electronic phone switching (analog, not digital) it was possible to give phone company customers who were willing to pay more priority access to trunk lines, avoiding the dreaded “all circuits are busy, please try your call again later.” Alas, some folks almost never got a circuit, so the FCC put a halt to that practice by mandating what it called “network neutrality” – first-come, first-served access to the voice network. When the commercial Internet came along, network neutrality was extended to digital data services, lately over the objection of telcos and big ISPs like Comcast, and the FCC is now about to expand those rules a bit more, which was in this week’s news. But to give network neutrality the proper context, we really should go back to that original analog voice example, because there are more details there worth telling.

Network neutrality in the voice era took from the telephone companies the opportunity to sell priority access to trunk lines, but it didn’t remove the need for big businesses to have such priority access. So AT&T invented a leased-line business where companies could buy whole circuits that operated 24/7 and were guaranteed access to the long distance network. By being a separate product with a separate tariff and sold in a completely different way, this leased line business, which had long been used by broadcasters but was now expanded to other business customers, was WAY bigger in revenue for AT&T (more than 10X) than simple priority access ever would have been, which is why AT&T suddenly stopped complaining.  Network neutrality made more money for the old AT&T than had it not existed. People forget that part.

Now Obama’s FCC is trying to fulfill what I’m sure was a campaign promise and codify network neutrality so future more conservative Administrations will have a harder time messing with it.  Republican interests, fulfilling promises of their own, are opposing the expansion of network neutrality saying it is an imposition of government on a free market that works just fine, thanks.  Oh, except for Wall Street, and the insurance companies, and the banks, and maybe six homeowners on your street and about four million others, but otherwise the free market is perfect.

Internet network neutrality became an issue because ISPs were found to be undermining it, blocking ports and packets and using other traffic shaping techniques not just to help certain kinds of traffic like VoIP, but specifically to hurt other kinds of traffic like Bit Torrent.

What’s the beef here, really? Are we running out of bandwidth?  Remember the FCC came about to administer public airwaves, which very much are limited, but wired networks aren’t, at least not in the same sense.

Cable systems these days often run their TV service at break-even and make nearly all of their profit on Internet, voice service, and video-on-demand. I know cable bills are always rising, but so too are the payments from cable systems to cable channels, which is why cable networks are booming and broadcast networks are wilting, because that cash flow to content creators doesn’t exist (in fact it is reversed) in the commercial broadcast model.

Cable Internet and phone services, in contrast, have no content cost. They leverage the existing cable infrastructure investment, and have as their main expense Internet backbone bandwidth that has been going down in price by 50 percent per year for more than a decade with no end in sight.

Right now the typical cable operator uses one analog channel (6 MHz – usually channel 80) for Internet service. That’s ONE PERCENT of the total bandwidth on an analog cable network.  Give up a shopping channel and Internet bandwidth could be instantly doubled.

There is no Internet bandwidth shortage.

DOCSIS 3.0 cable modem technology, which is rolling-out now, can bond together up to four analog channels (I can think of a few I’d gladly give up) and in turn offer up to 100 megabit-per-second Internet service.

Taking a look 5-10 years into the future makes the existence of these new network neutrality issues even less problematic.   The future of cable TV, for example lies clearly in switched digital cable service with recording capability, where the only active channels are those actually being used on a given subnet, freeing-up huge amounts of bandwidth for other uses.

Now start to think like a cable CEO circa 2019 or even 2015. You have the same short-term mentality of nearly all U.S. CEO’s, which means you care about this quarter, this fiscal year, and that date 2.5 years in the future when you’ll pull the ripcord on your golden parachute. Nothing else matters and nothing else impacts your business decisions. You suddenly realize that 90 percent of your profit is coming from 10 percent of your business – Internet and maybe voice. Nearly all the money you care about – profit – comes from providing a switched empty pipe to customers.  So what do you do? YOU SELL OR SPIN-OFF TO SHAREHOLDERS EVERYTHING EXCEPT THE EMPTY PIPE BUSINESS, THAT’S WHAT.

And the telcos will, too, because they’ll be in a similar position.

This is the inevitable future and it makes much of the current debate, well, silly.

Network operators will get out of the content business, which will be handled for the most part by Google/Hulu/whomever using shipping containers filled with servers docked at the local Network Operations Center – shipping containers for which the network (formerly cable and telco) operators will collect rent just like grocery chains now make their profit by renting out shelf space to Proctor & Gamble, not by selling things.

Where, in this new world of renting empty pipes, will the network operators come down when it comes to network neutrality? They’ll be all for it, having by then philosophically switched camps, because ONCE THEY STOP CARING WHAT BITS ARE IN THE PIPE, THAT PIPE STARTS TO MAKE MORE PROFIT.

So we’re getting all worked-up over something that is structurally destined to become a non-issue in the near future. Having said that, I remain a supporter of network neutrality simply because it’s the way I prefer my Internet to run.

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This week the U.S. Federal Communications Commission (FCC) releases its proposed new rules for Internet Service Provider (ISP) network neutrality.  I have written many times about Network Neutrality and once I have a look at the FCC proposal I am sure I’ll have comments to make here.  In general I’m in favor of rules that allow me, as a consumer, more digital freedom. It would be great to run Skype over my iPhone, for example, just as I can already run it over the cellular connection on my notebook. But right now I’m talking about a different kind of network neutrality, the kind I’m struggling to achieve in my own home.

I live in Charleston, South Carolina where my primary ISP is Comcast. I have a 16 megabit-per-second (mbps) business Internet service with five static IPs and an upstream speed that I think is supposed to be 2.0 mbps but actually measures around 2.5. On the Speakeasy Speed Test I have no problem clocking the full 16 mbps to Atlanta, either.  It’s not Verizon’s FIOS, it costs three times as much as FIOS, but my connection more than does the job.  Compared to some other places in the world of course my speeds are laughable.

So why is it that when I surf the net while speaking on my Voice-over-IP (VOIP) telephone, it breaks up?  It’s not like I don’t have enough bandwidth, both up and down. And the network in my house is 100 mbps wired Ethernet using Cat5 cable throughout.  Ah, but I’m using the hated Vonage telephone service you say, not Comcast’s VOIP offering.  That explains it: net neutrality violation!!!

Except it isn’t. Comcast and Vonage have been pretending to be friends for a while now. It’s all part of the “We don’t really need that old Net Neutrality” song Comcast and the other big ISPs have been singing, including the verse that says Vonage is okay by them.

Then why does my Vonage-connected fax machine not function reliably, either?

Maybe I need traffic shaping, you say. Let’s just adjust my router to give priority to those VOIP packets, as I am sure Comcast would do if I were using their service.

Except I already do traffic shaping. I run a rather robust firewall as a sort of Internet gateway that includes local DNS and Squid (proxy) service. VOIP Packets get first dibs on my cable modem and always have.

This problem has been driving me crazy for some time now, but I believe I know what’s happening and it has nothing to do with Comcast or net neutrality.

I’m pretty sure the problem is in the Vonage boxes that connect my phone and fax machine to the network, called Analog Telephony Adapters or ATAs. First, I don’t use my ATA’s as Vonage suggests. Vonage envisions a single-ATA network generally with a single PC, or at least they did when I got these puppies. They want me to plug my ATA into the cable modem and my PC into the ATA so the ATA automatically takes precedence. I can’t do that for three reasons: 1) my office is three floors above my cable modem; 2) my fax machine is not in the same room as my PC, and; 3) I’m pretty sure the Vonage Ethernet ports are limited to 10 mbps so hooking-in there would limit the bandwidth available to my PC. If I’m paying for 16 mbps, dag nabbit I want to use 16 mbps!

Given that I’m already doing traffic shaping in the router and have a huge excess of bandwidth for VOIP anyway, what’s the big deal using the ATA’s as I do, simply plugged into a 10/100 Ethernet switch? It shouldn’t matter.

Then I spoke with my friend Paul and came to a sudden realization. I’ve been messing with my Internet gateway, trying to convert it to a trio of $99 SheevaPlug computers that I’ll run as a tiny cluster just to see if I can do it. Paul said his testing showed each 1.2 GHz Sheeva was the equivalent of about a 10^th of his four-core AMD box. “But even that’s plenty to saturate an Ethernet connection,” he said.

The Sheeva installation isn’t even ready to go yet, but what came to me is that the poor Vonage ATAs just can’t keep up. I got them when I signed up for Vonage service in 2002!  Back then my computer had a single core and ran at 400 MHz. Today I have four cores and run at 3.0 GHz. While it technically isn’t supposed to work that way I’m guessing my PC is just so darned fast at grabbing and releasing bandwidth those little seven year-old Motorola ATAs from Vonage are having trouble getting a packet in edgewise. Yes, the switch should compensate for that but you know I think that switch is about seven years old, too.

That explains why VOIP clients like Skype and Gizmo that run entirely on my PC (no ATA) don’t have any problems.

Most of my hardware is replaced every three years, but these network components have been running undisturbed since they were first installed. And being digital they probably run as well as ever. They just weren’t built with the idea that one day there would be a bully in the house.

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The heyday of Artificial Intelligence (AI) was in the 1970s and 1980s.  Here was the logical evolution of office and industrial automation that would put an expert into every computer and by doing so both replace and augment employees, changing forever the world of work.  Only it turned out not to function that way because we underestimated the effort involved.  It was easy to imagine putting intelligence into a computer but very difficult to do so in practice.  There wasn’t enough processing power available for one thing, nor were there even enough experts, since it seemed to require having one on-hand to keep the machine in tune. Now IBM appears to have a plan to do it all again, though with a twist.  And this time, thanks to Moore’s Law and high costs for employee health care and pensions, it might even work.  God help us.

Today’s computers are smaller and thousands of times more powerful than the ones we worked with during the AI boom, but the problem is still one of programming — getting knowledge into the system in an efficient and usable manner.  For that matter, it is hard to envision computers other than robots performing many of these workplace functions, and robots aren’t ready. The better solution then, according to a just-published IBM patent filing (US29228426A1), might be to find a way to suck knowledge out of the experts then inject it into younger, stronger, cheaper employees, possibly even in other countries.

IBM’s proposed Platform for Capturing Knowledge describes how to use an imersive gaming environment to transfer expert knowledge held by employees “aged 50 and older” to 18-25 year-old trainees who find manuals “difficult to read and understand.”

IBM also discusses how its invention could be made available for customers’ use in return for “payment from the customer(s) under a subscription and/or fee agreement.”

What we’re talking about, then, is a possible revolution in workplace training, one where a lifetime of experience would ideally be sucked from the mind of an experienced worker to be injected into a trainee and then the older worker discarded.

There are several thoughts that came to mind as I read this patent application. Could IBM really be serious about such a plan? Then I imagined how enthusiastically the idea must have been received at IBM intergalactic HQ in Armonk.  What a great idea! Transfer knowledge from old to young, American to Argentinian, or even just hold it in machine storage for later use, disposing of the expert in the meantime.

To see it this way you have to understand one recent IBM mindset, which is that culturally IBM does not believe in job specialization.  Anyone can manage anything.  Anyone should be able to perform any job.  For a company whose motto used to be “think,” IBM is trying to reduce it to “do as instructed.”

This patent is a natural extension of that culture.  Though part of being an expert is the ability to figure out new stuff and master it.  But when you get rid of the real experts, who is going to figure out the new stuff?That doesn’t automatically fall out of this computer gaming scenario, which teaches functions and techniques, not intuition or actual experience.

Then I thought about that moment late in the tenure of IBM CEO John Opel when someone came up with the bright idea of urging companies that leased IBM mainframes to buy them, creating a huge revenue bubble that grew the company to more than 400,000 employees, setting it up for its 1990s crash.  Converting the leases was not, in itself, a bad idea. What was bad was assuming that such huge, essentially one-time, revenue would continue perpetually, which is exactly how IBM saw it.  Really.  Isn’t this the same thing, only now they are converting employees into some more disposable form? What happens when there are no more experts to convert?

IBM’s greatest threat is its ability to stifle innovation.  The way the company is off-shoring jobs and minimizing the value of its support workers demonstrates this.  The threat will be when a group of smart folks in China or India realize how things could be done better, then starts taking work away from IBM.  They will have access to an army of IBM foreign workers, too, who will bring customer contacts with them.

On the other hand, this application is also typical of an IBM patent.  There are many aspects to implementing such a training process — data gathering, information management, software, hardware, etc. — and IBM has patented every part.  So if anyone makes a something similar, IBM could sue.  If you create gaming software to teach almost anything to almost anyone, this patent may trump you.

In the end it may not matter then whether IBM runs out of experts or not.  Just so long as they don’t run out of lawyers.

I, Cringely readers from the Boston area who want to see if I reflect light in person can run that controlled experiment next Thursday, September 17th, when I speak to the Society for Information Management’s Boston Chapter.  Here’s the link. My topic is Consumerization of IT: Is Corporate IT about to Lose Control Again? The answer of course is “yes,” but the devil is in the details. Please attend if you can.