Moderated by James Surowiecki who writes about business/finance for the New Yorker. (I am an admirer of his writing.) It’s a panel on the investment environment.

One of the VC’s puts it baldly: his role is to put out as little money as possible and get as much control of the funded company as possible. Everyone is being more hard-headed about investments, looking for markets that are emerging, management teams that work, etc.

James: In a truly decentralized model, can you VCs make the sort of money you want to make?

Various answers. E.g., you can’t be something to everyone in a decentralized environment.

James: Are your ambitions less than a few years ago? Or are you going after particular niches?

Mike Hirshland of Polaris: “The interest in each of these cases is to invest in the winner, the one that defines the platform.” But only a few companies can do that directly. You need a “go to market” strategy. [Jeez do I hate that phrase. Allan Karl explains in a chat that it means that they’re not looking for innovation.] Says another VC: Home runs are not required; singles and doubles are ok, but they still look for big winners. [Sorry to be vague about who’s speaking but there are no name placards.]

Q: Any windfalls coming?

A: Spectrum allocation.

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Moderated by James Surowiecki who writes about business/finance for the New Yorker. (I am an admirer of his writing.) It’s a panel on the investment environment.

One of the VC’s puts it baldly: his role is to put out as little money as possible and get as much control of the funded company as possible. Everyone is being more hard-headed about investments, looking for markets that are emerging, management teams that work, etc.

James: In a truly decentralized model, can you VCs make the sort of money you want to make?

Various answers. E.g., you can’t be something to everyone in a decentralized environment.

James: Are your ambitions less than a few years ago? Or are you going after particular niches?

Mike Hirshland of Polaris: “The interest in each of these cases is to invest in the winner, the one that defines the platform.” But only a few companies can do that directly. You need a “go to market” strategy. [Jeez do I hate that phrase. Allan Karl explains in a chat that it means that they’re not looking for innovation.] Says another VC: Home runs are not required; singles and doubles are ok, but they still look for big winners. [Sorry to be vague about who’s speaking but there are no name placards.]

Q: Any windfalls coming?

A: Spectrum allocation.

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There’s a chat goin’ on among Supernova attendees and non-attendees here.

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Clay begins by reminding us of the French “green screen” system, Minitel. When it was created, it was the right answer. The Internet made it the wrong answer that “cost them an enormous cycle of innovation.” “Our Minitel is twisted pair” and is all the policies that say that it’s a good idea to run a circuit-switched, metered, analog, voice-optimized network.

The situation is dire. But why aren’t more people up in arms about it? One reason: our habitual techno-optimism. Engineers see two entities: the network and the things plugged into it. We have incredible PCs and unimaginable lengths of fiber. But politically we are in a three entity world: netword, edge, phone company (i.e., “the people engaged in monopoly rent extraction for the twisted pair that goes into your basement”). The separation between local and long distance has created a gap: a “creamy” core of fiber and a “crunchy” shell of copper going to your house. We have a zone of high speed connectivity in the home (e.g., plug your camera into your PC) and a zone of high speed connectivity in the core connected by a thin line of copper.

Why do the phone companies stifle innovation? They’re just responding to business conditions. Clay uses Vonage (a voice over IP system) and three months later cancelled his long distance carrier. The erosion of voice traffic is a death knell because they lose $2 of voice revenue for every $1 of IP they sell a customer. Clay says he thus disagrees with Reed: the incumbents can’t be protected.

What to do about this? Clay doesn’t know. As long as IP is the third rail — as soon as the phone company touches IP, their revenues fall faster than costs because vboice revenues are artificially high — the phone companies will fight innovation. “If we do nothing, nothing will happen”: nirvana for incumbents.

There are only two ways out of this, says Clay. 1. Functional competition. 802.16, powerline Internet, municipal fiber to the home, etc. Clay isn’t optimistic about any of these within 5 years. 2. Change the regulatory environment, which is tough in this company. “We’ll let shoe stores fail. We’ll let drugstores fail.” But we won’t let agriculture fail and we can’t imagine a country in which the telephone company fails. “Challenges to the phone companies are viewed as scams.” They should be force to account on replacement value.

There’s always option 3: stagnation. We are below #15 in growth of high speed access. We are fallling behind because we don’t have the political will to connect center to edge directly. The political shape (3-entity) is more important than the engineering shape (2-entity). We aren’t going to get there soon because twisted pair is our Minitel.

Q: Multi-terabyte storage changes everything.

A: Yup.

Notable quote: “You run into a restaurant and say that you’re going to get French fries off the menu. You’ll call them ‘freedom fries.’ But you forget that it’s still called a ‘restaurant’ and it’s still called a ‘menu.'”

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Hundt is the former chairman of the FCC. He asks what we’re doing to stimulate demand for technology.He says we need a new universal service policy for broadband: 100% of households with real broadband. It would throw money at the problem and increase the scale of the solution, and it would create a new platform for new services. And, it would require an upgrade in the ability of technology to do this effi iently. But, he says, we should be careful not to destroy cable and telephony. He would have the government give everyone in the US $20/month until the “sunk costs” are paid off. Then the company can charge maintenance costs. It’d cost $50B over 3 years. It’d all be done through fiber [What about open spectrum?] And he’d remove the subsidies for voice transmission.

He says that we have a policy that charges a surtax on TV’s in order to pay for something no one wants: tuners capable of receiving digital over-the-air broadcasts. It’ll raise $40B, or about what it’d cost to provide broadband fiber to every household.

Other countries will provide broadband nationally. This will in fact be the smallest of the steps they take. We don’t want to fall behind.

Wouldn’t it be nice, he asks, to throw money at problems that can be solved, e.g., $50B to research cars that won’t contribute to global warming, $50B to end cancer, etc.

Q (Adina Levin): You say we should speak up about these policies, but that seemed to make no difference to the latest FCC ruling on media consolidation.

A: It may look like it may not have done anything, but when those emails poured in it became that there was an issue here. There is a strong sense in Congress that the FCC as an unelected group went too far.

Q (Arnold Kling): Why cable? Why does the government think it knows best about how to deliver connectivity?

A: It would stimulate demand even if the infrastructure it built isn’t the right one in the long term. A pure physical link (fiber) would be a good bet for providing a good-enough infrastructure. Likewise, when the highway system was built, there was a dispute over whether asphalt or concrete would be best. Hundt would be happy to open it up for competitive bidding, let municipalities aggregate, etc.

Q (me): Is there a hope in hell that this will happen?

A: Yes, but not necessarily in a timely fashion. If Voice over IP were to strip revenues from the telephone industry, you’d see government step in to put a safety net under the industry. It depends on what crisis you imagine.

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I’m at the SuperNova conference, Kevin Werbach’s confab on a universe of distributed apps and ideas. There are about 100 peoplehere from a more diverse set of backgrounds than often is the case at tech conferences. In particular, there are a bunch of government regulators here. Should be interesting.

The conference weblog is here. There you’ll find links to a wiki where you’ll find a list of live bloggers and a group weblog via trackbacks.

(Thanks to Scott Johnson of Feedster for helping me get my wifi working.)

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Joe Conason does a number on Coulter’s defense of McCarthyism. (It requires a subscription to Salon.)

That we are even discussing why McCarthyism was a bad thing is pretty depressing.

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Miles who created TinyApps.org has been quoting passages from the likes of Plutarch and Buckminster Fuller in his blog.

Pito Salas, former CTO of eRoom, has started a blog also.

Meanwhile, over at his blog, Ken Camp has posted a chunk of his excellent book, IP Telephony Demystified.

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RB on psychology, despair, fascism and human voice.

Also, there are some cool photos of him in the entry right below that one.

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I can’t tell you what’s wrong with Ronnie, although something manifestly is. But it’s easy to tell you one thing that’s right withh Ronnie: He can stand in front of a crowd of 1,500 and sing a hymn with his arms and heart wide open. His voice may be in the middle of the bell curve but you would weep with joy to hear him.

It’s hard to know how to react to Ronnie and the other 50 campers at Camp Jabberwocky. They are all profoundly disabled, from cerebral palsy sufferers twitching in their full-support wheelchairs to those with diminished intellects and emotional inflammations. But you won’t hear words like “disabled,” “sufferer” and “diminished” at Camp Jabberwocky. Not because the place is politically correct. Quite the contrary. No one there pretends that the campers are just like the rest of us. The campers are who they are. But for much of their lives, they’ve been treated as less than what they are, for most of them wear their troubles in their faces and shambling bodies. Shall we call it a human impulse to turn away from them?

And then Ronnie gets on stage. He is accompanied by a local resident who happens to be a well-known pianist. He sings a song and we hear him for exactly who he is, which is more than we thought he was. And that is a joy that will make you weep.

The story of Camp Jabberwocky makes no sense. It was founded 50 years ago on Martha’s Vineyard, although “founded” is too strong a word: Helen Lamb — universally known as Hellcat because of her determination — got it in her head that it’d be good to bring 6-8 people with cerebral palsy to the island for a week or two. So she got a 15-year-old friend of hers to volunteer and together they just did it, schlepping 6-8 kids in wheelchairs down the steps to the beach at Oak Bluffs, taking them on the Flying Horses. No money, no plan. And that’s how Camp Jabberwocky has proceeded and grown for 50 years. No one pays, no one is paid. There’s precious little solicitation. It just happens.

It doesn’t happen in a vaccum. The Vineyard, for all its preppy reputation, has a history of being diverse, open and accepting. For example, when in the 1900s there was an abnormal number of children born deaf, rather than segregating them, the community learned to sign.

But it’s not just the Vineyard. Shall we call it the human impulse to connect once we allow ourselves to?

Here are some photos of the Fourth of July Parade and the 50th anniversary celebration.

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