Author: RB

The merger of Cingular with AT & T Wireless is probably going to be less controversial than the Comcast/Disney dealie, and makes more obvious business sense. Cingular gets a good GSM network, a ton of subscribers, and a boat load of towers, but best of all:

AT&T Wireless also has a significant amount of spectrum, the licensed airwaves that carry cellphone signals, while Cingular has been hungry for more.

Just in time to be aced out by Wi-Fi’s new channels. Only kidding. They both need more coverage, so the merger makes sense from that perspective. Now if these guys can just figure out what all that GSM stuff is really good for, they’ll have a chance to survive for a while longer.

Venture capital is up 20 percent in the 4th quarter in Silicon Valley:

Venture capitalists invested $1.62 billion in Bay Area companies in the fourth quarter — up a strong 20 percent from the $1.35 billion the quarter before, according to the MoneyTree Survey conducted by PricewaterhouseCoopers, Venture Economics and the National Venture Capital Association.

This is obviously a good sign, by itself, for Silicon Valley folks, but what about the rest of the nation? It strikes me that investors really should be warmer toward investing in areas with lower living costs, such as the rain cloud area where I live.

The old model where industries clustered in “centers” alongside their competitors made sense when the industry had a natural geographic tie to the area because of resources (steel mills where the iron ore is, canners where the fruit is, etc) but in the knowledge industry you simply need to be where people want to live. It’s not at all clear to me that biotech will cluster, or that Silicon Valley will remain the center for chips and networks.

The upside for clustering is local talent, but the downsides are losing your trade secrets to somebody’s next door neighbor, and a little too much imitation in product design. For Intellectual Property businesses, these hazards are unacceptable risks, so you don’t see a lot of genuine research labs in the Valley.

Here’s a hopeful sign for Silicon Valley techies:

Venture capitalists invested $1.66 billion in Bay Area companies last quarter — up a strong 22 percent from the $1.36 billion the quarter before, according to a survey by VentureOne and Ernst & Young to be released today. It’s the first decisive upward swing in investments after a year of treading water, and is the most funding since mid-2002.

Along with an upsurge in general funding, there was a 30% pop in seed money, much of it in wireless, VoIP, and biotech. So the Valley continues to re-invent itself.

Silicon Valley and the rest of the Greater Frisco Bay Area has always been one of the highest-cost of living areas in the world, but it’s enjoyed a productivity advantage over the rest of the US of 94%. When you factor high Silicon Valley costs into productivity, however, the area slips behind some fairly humble competitors, according to a shocking new study:

But with the cost of living factored in, the region’s advantage over the nation shrank to 31 percent in 2002. Only two years before, the Bay Area’s cost-adjusted productivity edge had been 43 percent. Moreover, the region had slipped into third place in the productivity race, behind Boise, Idaho, and Austin, Texas, after taking the cost of living into account.

It’s pretty sad when you can’t keep up with Texas, given the intellectual pretensions you find among Bay Area residents, but Frisco assemblyman Mark Leno is on the case, with the kind of forward-looking and visionary plan you only get from the nation’s best and brightest: raising the car tax in Frisco.

“Look, we paid the fee — which is 2 percent of the value of the car — from 1948 to 1998 without a word of debate or contention,” said Leno, D-San Francisco. He pointed out that the rollback was meant to last only as long as the state enjoyed good times.

Those poor Texans won’t even see this coming.

While Clark County is booming, Silicon Valley is still sucking wind, according to the illustrious Mercury News:

The county’s unemployment rate remained unchanged from the revised September rate, 7.6 percent, according to the state Employment Development Department’s monthly report. This meant 69,300 county residents were unemployed in October.

So the nation is adding jobs, the state of California is adding jobs, but Silicon Valley is sitting still. I can see why, given some of the pitches I’ve heard from Valley startups recently. Buyers of hardware and network systems aren’t as gullible as they used to be, so Valley VCs and startups need to wise up just a tad and stop promising the moon when all they really have is a trip to Idaho.

Clark County, Washington, just across the Columbia River from Portland, City of Hippies, is one of the most economically depressed areas in the entire country. So why are local officials cheery about the jobs picture? Because there’s a local hiring boom:

Fifteen businesses either relocated or expanded in the county with the help of the development council since January. Of those, 13 shared details of their operations, and together they are generating about $21 million in annual payroll with average pay of $38,800 a year per job. The county’s average wage is $31,000.

“We declare the recession over in Clark County,” said Bart Phillips, development council president, at the group’s annual membership meeting in Vancouver. “It’s evident in our numbers. Clearly businesses are looking ahead to a growing economy.”

This is happening in a county with an unemployment rate of 8.9%. So Paul Krugman, Howard Dean, John Edwards and other Dem party hacks who ask where the jobs are should please look here. Many of Clark County’s new jobs are in the services sector, the kinds of jobs that are supposed to be moving offshore; this apparently means “off the shores of the Columbia River” from over-taxed Oregon and California.

Larry Lessig?s book The Future of Ideas is an examination of the Internet?s influence on social discourse as well as an analysis of the forces shaping the net in the past and present. The message is both utopian and apocalyptic, and the analysis aspires to be technical, cultural, and legal. It?s an ambitious enterprise that would have been tremendously valuable had it been successful. Unfortunately, this is one of the most absurd books ever written. Its fundamental premise — that the Internet can only be regulated according to a mystical appreciation of the values embedded in its original design — is ridiculous, its reseach is shoddy, and its exposition of these values is deeply confused.

Apart from gross errors of theory and fact, the book is nonetheless an amusing and deeply felt diatribe against modern government, industry, and society, written with such earnestness and passion that its shortcomings in humor and insight may almost be forgiven. Unfortunately, Future has developed a cult following that threatens to go mainstream with a deeply disturbed misconception of the Internet’s design, purposes, and challenges.
Continue reading “The Future of Mediocrity”