Men Behaving Badly

I'm a Verizon DSL customer and, on balance, a happy one. The service works very well most of the time, providing our family with high-speed access to the Internet. It's not as fast as a T1 line, but it's about $950 a month cheaper. From Verizon's point of view, providing this household with high-speed Internet access for $49.95-a-month is almost certainly a money-losing proposition, but it's a great loss leader because with our DSL line comes local and long-distance telephony. And that is, I can assure you, a mini-ATM for Verizon shareholders (which is one reason we own Verizon stock).

Recently, the House of Representatives passed legislation that makes it easier for the Regional Bell Operating Companies (like Verizon) to dominate high-speed Internet access. This legislation will probably die a much-deserved death in the Senate, but the larger point is that the bill is completely unnecessary. And here's why.

Consider our home. We have two telephone lines (one for voice, one for fax), DSL service and DirectTV. We also have two mobile phones. The cost of the mobile phones is $39.95 each. The cost of the two phone lines (including all long distance and local charges) is about $110 per month. In another year (so they say), our mobile phones will likely provide us with crystal clear voice communications, even in the basement. So we can save $110 per month by getting rid of Verizon local and long distance. We could save that money now, except the reception on our mobile phones isn't quite good enough.

But what really keeps us tethered to Verizon local and long distance is the DSL line. It's there, it's right next to the computer, which is right next to the phone, which is really a base station for a bunch of cordless phones around the house. The reception is great, the speaker phone works perfectly, I'm listening to my messages right now as I type this item. The truth is we probably won't "go wireless" as long as we have DSL. If you look at the households that have DSL, virtually every one of them continues with local and long-distance land-line telephone service.

So who needs legislation that enables the RBOCs to ramp up the build-out of DSL (without meddlesome competition), when protection of two of their most important revenue streams (local and long distance) all but requires that they build out DSL as fast as they can do it? Thomas Weber, "E-World" columnist for The Wall Street Journal, has an excellent piece today on this and other legislative meddling with regards to the Internet and information technology sectors. After making hash of the RBOC arguments with regards to DSL, Weber slams Sen. Fritz Hollings (D-SC) for pandering to the Entertainment Industry with the "notion that computer makers should be required to build copy-protection technology into all PCs, lest Hollywood find itself Napsterized." (emphasis added). The important point Weber makes is that the Internet/information technology sectors have done very well by their customers without a lot of government regulation and interference. Fritz Hollings and Tauzin-Dingell will make things worse, not better.

PS: Those seeking more information on Hollings and the Entertainment Industry should check out Instapundit, who has been all over what he calls "Hollingsgate" from the git-go.

Page Six Sigma

Richard Johnson, call your office. The Wall Street Journal reports today that the editor of The Harvard Business Review is under fire for allegedly having a "romantic relationship" with former GE Chairman and Chief Executive Officer Jack Welch. Here are the first few paragraphs from the story:

There's a staff mutiny afoot at the vaunted Harvard Business Review.

Four top Review editors have written letters to the editorial director of Harvard Business School's publishing operation, seeking the resignation of their boss, Editor Suzy Wetlaufer. Citing perceived ethical breaches by Ms. Wetlaufer, some of the letter writers said she had lost the confidence of a majority of the magazine's top editors.

The revolt was catalyzed by an aborted article by Ms. Wetlaufer, in which she interviewed former General Electric Co. Chairman Jack Welch. In late December, after the article was in its final editing stages, Ms. Wetlaufer called her boss, Walter Kiechel, editorial director for Harvard Business School Publishing, to recommend that it be scrapped, according to people familiar with the situation.

The reason Ms. Wetlaufer gave was that she "had become too close to Jack" to avoid the appearance that the article wouldn't be objective, these people say. Several weeks before the story was pulled, Ms. Wetlaufer told at least three Review staffers that she and Mr. Welch were having a romantic relationship, people familiar with the conversations say.

The Harvard Business Review has long been a stage set for office coups and intrigue. But this may well be the first time HBR becomes fodder for the tabs and Entertainment Tonight. Larry Summers, call your office.

Loose Nukes

"It's going to be worse, and a lot of people are going to die," warns a U.S. counterterrorism official. "I don't think there's a damn thing we're going to be able to do about it." This, it seems to me, is the relevant quote from the Time magazine story that kicks off the new week.

What makes the Time report on loose nukes credible? According to a bipartisan nuclear non-proliferation task force report:

Such threats are not hypothetical. Consider the following:

• In late 1998, conspirators at a Ministry of Atomic Energy (MinAtom) facility in Chelyabinsk were caught attempting to steal fissile material of a quantity just short of that needed for one nuclear device. The head of MinAtom’s nuclear material accounting confirmed the attempted theft and warned that, had the attempt been successful, it would have caused “significant damage to the Russian State.”

• Early in 1998, the mayor of Krasnoyarsk-45, a closed Russian “nuclear city” that stores enough HEU for hundreds of nuclear weapons, wrote to Krasnoyarsk Governor Alexander Lebed warning that a social explosion in his city was unavoidable unless urgent action was taken. Nuclear scientists and other workers in the city remained unpaid for several months, and basic medical supplies could not be purchased. General Lebed, a former National Security Advisor to President Yeltsin, had earlier proposed to Moscow that his region take responsibility for the nuclear forces and facilities on its territory, pay salaries for these military officers and atomic workers, and take command of the structures. The Russian Government has never agreed to the proposal.

• In December 1998, an employee at Russia’s premier nuclear weapons laboratory in Sarov (formerly Arzamas-16) was arrested for espionage and charged with attempting to sell documents on nuclear weapons designs to agents of Iraq and Afghanistan for $3 million. The regional head of the Federal Security Bureau, when reporting the case, confirmed that this was not the first case of nuclear theft at Sarov and explained that such thefts were the result of the “very difficult financial position” of workers at such defense enterprises.

• In January 2000, Federal Security Bureau agents arrested four sailors at the nuclear submarine base in Vilyuchinsk-3 on the Kamchatka Peninsula with a stash of precious metals and radioactive material they had stolen from an armored safe in their nuclear submarine. After the sailors’ arrest, investigators discovered at their homes additional stashes of stolen radioactive material and submarine components containing gold, platinum, silver, and palladium.

These are a sample of dozens of actual incidents. Imagine if such material were successfully stolen and sold to a terrorist like Osama bin Laden, who reportedly masterminded the bombings of the U.S. embassies in Kenya and Tanzania and is the chief suspect in the recent attack on the U.S. destroyer Cole.

Indeed. The best thumbnail sketch of the nuclear non-proliferation crisis was written by Graham Allison, a former Pentagon official, for The Economist last fall, shortly after the September 11 attacks. Unfortunately, it costs $2.95 if you are not a subscriber to the magazine or to Economist.com. It is well worth reading and basically conforms with the view of the Nuclear Non-proliferation Task Force. Which is this:

“....the most urgent unmet national security threat to the United States today is the danger that weapons of mass destruction or weapons-useable material in Russia could be stolen, sold to terrorists or hostile nation states, and used against American troops abroad or citizens at home.”

Old Friend, New Blogger

Michael Thomas, who writes the excellent "Midas Watch" column for The New York Observer, has joined the bloggers. For a while, in 2001, Thomas wrote an equally excellent "Bush Watch" column, but for some reason it was abandoned. Anyway, blog-miners interested in smart commentary about business, politics and culture should bookmark the Midaswatch site. Thomas is as good as they get.

Big Easy vs. The Killer Ap

South African Ernie Els may be the only golfer extant in Tiger Woods's class. He can really play and he can make shots under tremendous pressure. That eight iron at the US Open at Congressional on Sunday may well be one of the greatest golf shots I've ever seen.

When the wind comes up in the afternoon at Doral, which is this week's PGA venue, the Blue Monster course is as hard as they come. Els had a late tee time today and had to play in a 25 mile-per-hour wind. And he shot the lights out to take a 2-stroke lead.

Mr. Woods, who hasn't had a good second round all year, grinded out a 70 (two under), leaving him four shots back. So it looks like we might have ourselves a golf tournament worth watching this weekend. An Els-Woods shoot-out, with the wind howling across the Monster, would be professional golf at its best.

One Last Thing

What is Majority Leader Thomas Daschle (D-SD) thinking? He wants to be president. The biggest problem facing any Democratic presidential candidate can be reduced to two words: "white males." White males support President Bush's handling of the war on terrorism by margins of 20-1. So what is the rationale, exactly, for Daschle's attack on President Bush's handling of the war on terrorism? And why does he choose Joe Biden and Dick Gephardt to be his back-up singers?

One Little Factoid

The woman who writes the media column for Bloomberg (whose name I forget) had an interesting factoid which I copied to a "notes" file on my laptop and then promptly forgot about. I'm on my laptop now and here it is: "Excluding AOL Time Warner's own spending, advertising and commerce revenue at the America Online unit actually declined 27 percent in the fourth quarter." When I get home I'll fix this item and give her proper credit.

Wi-fi Spreads

The thing I still don't understand is why Con Edison and its equivalents around the country don't build out wi-fi networks that wirelessly connect stranded homes on the last mile to the fiber optic networks that run (largely unused) across the country. Con Edison comes to my house every month to read the meters. As long as they're here, they might as well hook up a wi-fi antenna to my roof. With a range of 300 yards, that antenna would service every room in the house and all of my outdoor property. If they did every house in the River Towns, I could go anywhere and hook up to high speed Internet access, which would be nice at the library, the El Dorado Diner, etcetera. I'd be happy to pay them half of what I pay Verizon for a DSL connection. I'd probably pay them the exact same amount.

The impact of wi-fi networks is being felt in places like Aspen, Colorado (which is totally wi-fied), Seattle, Salt Lake City and parts of Boston/Cambridge. There's a good report in today's Seattle Times about the impact of wi-fi on two coffeehouse chains. You can read it here.

Is AT&T the Next IBM?

In the middle of the last recession, everybody and their brother said that IBM was toast. There were articles about it, there were books about it, it was business conventional wisdom squared. Instead of folding, IBM reinvented itself as a information technology services company and regained its place as one of the world's most esteemed (and highly valued) corporations.

The Economist notes that something similar may now be happening at AT&T. AT&T President Dave Dorman is trying to do for his company what Lou Gerstner did for IBM. He just might do it.

Good News on Text Messaging

I'm a Voicestream wireless customer (thanks to a WalMart promotion) which gets me all I need for roughly $40 a month. The phone was free, the first month was free, all the "initiation" and "security deposit" charges were waived, I'm a happy customer, thank you Sam Walton for every-day-low-pricing your partners. Voicestream works pretty well. Not as well as Verizon, but close enough and cheaper.

As it happens, I don't really like talking on the phone, but I'm a huge fan of text messaging. MEET ME ON 1ST TEE AT 12N 2MORO is my idea of wireless communication. And therein lies the problem, because with Voicestream (and Sprint and Verizon), you can only text message wirelessly to same service customers. This problem, happily enough, is about to go away, according to CNET. Which is very good news indeed.