SMART Letter #71
Expedient Pricing Plan
May 3, 2002

             SMART Letter #71 -- May 3, 2002
           Copyright 2002 by David S. Isenberg -- "avoiding the pain of an original thought" -- -- 1-888-isen-com

>  Expedient Pricing Plan for High-Speed Access
>  Sometimes you get Shown the Light
>  FCC NPRM 02-33: Forward to the Past
>  Conferences on my Calendar
>  Copyright Notice, Administrivia

   by David S. Isenberg

Wireless carrier E-xpedient Networks filed for bankruptcy 
last fall.  Bawling echoed up the drainpipe long after this 
baby disappeared, because E-xpedient got one of the most 
basic pieces of the broadband puzzle right -- the pricing 

E-xpedient was offering 100 megabit per second service in a 
handful of cities, most recently Miami, when it went under.  
It would put a pair of bi-directional transceivers on 
rooftops of tall buildings to create a redundant wireless 
ring.  It was a reliable, cost-effective architecture, and 
the company was executing well, but it ran into the 
unavoidable fact that constructing networks and selling 
connectivity the old-fashioned way precedes revenue growth 
-- just as capital markets were closing.  (I was hoping to 
make a business alliance between E-xpedient and, 
but alas, it was not to be.)

E-xpedient offered 100 megabit-per-second connectivity for 
$100 a month!  Who in their right mind would say no?  But 
there was a gotcha -- for $100 you could only download one 
gigabyte per month.  Theoretically, a customer could suck 
down their monthly quota in two minutes.  But practically 
speaking, a gigabyte per month per person is a practical, 
entry-level quota for today's normal Internet use.  It 
allows for a reasonable amount of email and Web surfing, 
some streaming audio and maybe even a few mongo downloads.  

Furthermore, high-speed connectivity has other advantages 
besides raw capacity.  The $100 plan was always-on, with 
almost-instantaneous latency, and the option value of full 
100-megabit capacity when needed.  

E-xpedient's founder, Brian Andrew, explained to me months 
ago that this allows users to start within their existing 
comfort zone, at price points similar to DSL, Cable and 
even dial-up.  Then as entry-level customers' thruput grew 
(as we'd expect), they could move into higher-priced tiers.  
Andrew had hoped to capture 75 or 80% of the offices in a 

E-xpedient made moving up to a higher tier painless.  When 
customers exceeded their monthly bit budget, they'd get a 
screen-pop to authorize the next tier via credit card.  
Sixteen digits and an expiration date later, they'd be back 
on the air.  Go without service until the first of next 
month, or buy more bits?  It'd be a no-brainer.

SMART Person Matt Oristano, who founded SpeedChoice, a 
wireless ISP that he sold to SPRINT when the selling was 
good, observes that monthly bit budgets make sense not only 
for the customer, but also for the business.  He writes:

  "Backbone bandwidth was our single greatest cost per 
   customer.  Why [do most ISPs] tier by speed, when extra 
   speed by itself literally costs the . . . operator 
   nothing?  About 10% of our customers accounted for 90% 
   of our bandwidth usage.  About 1% accounted for 40%."  
   [Therefore,] the logical [pricing plan] is to surcharge 
   by the gigabyte for customers who download huge 
   quantities of data.  And, lest cable operators cry that 
   this is too difficult, any Cisco router can be 
   interfaced with a back-office system to automatically 
   generate the surcharges.  [We] wanted to give each 
   customer the best possible surfing experience, [and] we 
   were moving towards surcharging for download volume
   . . . when Sprint interrupted us.

  "Today we see cable ISPs moving towards distasteful 
   practices like contractually prohibiting their home 
   customers from using routers.  Wouldn't tiered service 
   be a better option?"

Tiering by monthly thruput (in most cases) will 
discriminate resellers of the service from casual home 
networkers.  This is much better than declaring hard-to-
enforce usage policies and then hiring spies to peer into 
our homes (like Comcast is alleged to be doing).  But it 
will also discriminate against heavy audio and video users, 
even innocent ones like home-movie buffs; this is not so 
good.  Nevertheless, tiered pricing seems like a reasonable 
intermediate step between what we have now and a world in 
which the cost of connectivity is negligible.

E-xpedient might be bankrupt, but broadband wireless 
analyst Steve Stroh* says, "Don't count Brian Andrew out.  
He'll be back."

  *Steve Stroh is the perpetrator of the "Focus on 
   Broadband Wireless Internet Access" newsletter, an in-
   depth review that gets it.  The subscription fee 
   is worth every penny -- contact

PLACES (if you look at it right)
   by David S. Isenberg

For a couple of years, people were saying, "Would you 
believe that the hippest laptops are made by IBM?" with 
genuine amazement in their voices.  

Today some of the edgiest thinking on new uses of spectrum 
can be found -- are you sitting down? -- at the FCC.  Not 
that The Commissioners are likely to do anything about it, 
but at least the intellectual underpinnings are beginning 
to form.  Mike Powell may be Billy Tauzin's protégé, but 
he's no dummy.  He realizes that current wireless 
regulation, based on 1932 ideas of channelized frequency 
bands, is obsolete.  He understands that we stand on the 
verge of a whole new wireless regulatory regime.

And Bob Lucky, the chairman of the FCC's Technical Advisory 
Council (TAC), is no dummy either.  He knows the difference 
between a stupid rule, a stupid company and a Stupid 

The TAC meeting on April 26 bubbled with new thinking.  
Most SMART People are already familiar with ideas of ultra-
wide-band (UWB) transmission, of multi-hop radios, of smart 
antennas that can use phase information to point themselves 
at the signal source, and of transmitters that can adjust 
radiated power to required power.  

Vanu Bose is not only thinking, he's doing.  His company, 
Vanu, Inc., builds software-defined radios.  Vanu's base 
station is really stupid.  It captures the broadest band of 
signals it can from several antennas designed to cover the 
spectrum, then it modulates this analog signal onto Gigbit 
Ethernet with no further analysis, and backhauls it to one 
or more centralized computer farms.  

The computation center can apply whatever logic makes 
sense.  Rush hour?  Process the signal so that as many 
antennas as possible point at the road.  Later in the 
evening?  Point the array away from the road, towards the 
suburbs.  Emergency?  Tie the FBI's digital modulation to 
the local fire department's FM.  And so on.  

Too many people think of software-defined radios in terms 
of mobile handsets.  It's only one corner of the space.  UC 
Berkeley's EE Guru, Professor Bob Broderson, observes that 
software defined handsets have impractical power 
requirements given today's battery technology.  Vanu Bose 
agrees, which is why he is focusing on base stations and 
centralized post-processing first.  There's a lot of 
mileage in that idea.  It's the shared infrastructure -- 
and the willingness not to impose inflexible "optimized" 
processing on the signal until absolutely necessary -- 

   by David S. Isenberg

[The cluefullness that I witnessed at the FCC Technical 
Advisory Committee Meeting is not necessarily diagnostic of 
the entire FCC.  The FCC's NPRM 02-33 "tentatively" defines 
broadband access to be an information service.  Wrong!  

The FCC mindset seems to suck you in, and once you're in, 
no matter how hard you swim, you can't get out.  It feels 
like the classic good-intentions-gone-bad panic dream.  
This must be what Peter Drucker was talking about when he 
said, "Don't solve problems, pursue opportunities."  

Delusional state or not, my visit to the FCC last week 
inspired me to submit the comment below.

To file a comment on NPRM 02-33, "Appropriate Framework for 
Broadband Access to the Internet over Wireline Facilities," 
follow the form below and mail it to by close 
of business TODAY, May 3, 2002.]

ECFS - E-mail Filing
		David S. Isenberg

  Email Comment
I am writing to oppose the reasoning behind NPRM 02-33, 
"Appropriate Framework for Broadband Access to the Internet 
over Wireline Facilities", because I am afraid that 
treating broadband Internet access as an information 
service (as proposed by NPRM 02-33) would deprive United 
States citizens of the single most important feature of the 
Internet that has made it such a runaway success over the 
last decade.

Let me introduce myself.  I have a Ph.D. in Biology from 
the California Institute of Technology, where I studied 
human speech.  I spent 12 years, 1985-1998, at AT&T Bell 
Labs, where I served as Distinguished Member of Technical 
Staff.  Today, I make my living as an independent 
commentator on telecommunications.  While I serve on 
numerous advisory boards and have numerous clients, I am 
beholden to no commercial interests.  I am writing as a 
concerned citizen of the United States, and I am writing 
with hope that recent great advances in communications 
technology -- and, more importantly, in network 
architecture -- will become available to all.

In my understanding, "access" involves connecting my 
computer (and other digital communications devices) to the 
Internet.  "Information" is quite different -- information 
is in the ones and zeros that enter my computer to be 
processed by it.  Information can flow into my devices over 
a variety of "access" -- over a wire, over a cable, over an 
optical fiber, or through the air (either as radio-
frequency energy, or as light-wave energy).  That is, the 
same sequence of ones and zeros can enter my computer by 
any of these access methods.  So to equate "access" with 
"information", as does NPRM 02-33, is simply incorrect.

It was not always so.  The telephone network was developed 
to deliver one kind of information -- the human voice.  It 
was engineered for voice, and it gave access to voice.  
Everything else that it carried (e.g., touch tones, modem 
signals, signaling information to set up telephone calls) 
was either an exception, or an adjunct to voice telephony.  
The wire that came into the house could not be 
distinguished from the service it provided.  It was the 
same for television and radio -- each had its own dedicated 
infrastructure (be it a wire or a frequency band) to carry 
a specific type of information.

The great advance of the Internet was that its fundamental 
architecture separated "access" from "information".  Any 
one of the various forms of access to the Internet puts one 
in touch with an infinite array of information.  
Furthermore, providers of this information (information 
service providers) do not own special infrastructure -- all 
they need is a server and any of the several methods of 
Internet access.  As a result, the Internet is wide-open to 
innovation, and we have applications and services like 
email, Web browsing (in all its manifestations), ecommerce, 
Internet telephony, streaming audio and video, chat and 
instant messaging.  

Not a single one of these information (and communications) 
services was brought to market by a telephone company or a 
television company or a cable operator or a broadcast radio 
network.  No, access is a fundamentally different business 
from "information service".  To equate "broadband access" 
and "information service" -- as NPRM 02-33 proposes -- 
would be a horrendous step backwards.

Without separation, "broadband access" as an "information 
service" is likely to resemble the failed Interactive TV 
experiments of the early 1990s.  TV-on-speed is not "the 
Internet" -- and vice versa.

David S. Isenberg
[Electronic comments submitted to the FCC must have
 "signed" full name at bottom of text -- David I]


May 21-23, 2002.  Boston.  Connectivity 2002.  A 
celebration of networks so abundant that they will carry 
everything effortlessly.  For more information see or contact Daniel 
Berninger, 631-547-0800.

COPYRIGHT NOTICE: Redistribution of this document, or any 
part of it, is permitted for non-commercial purposes, 
provided that the two lines below are reproduced with it: 
Copyright 2002 by David S. Isenberg -- -- 1-888-isen-com 

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David S. Isenberg            , inc.                         888-isen-com                       203-661-4798 
     -- The brains behind the Stupid Network --