Monthly Archives: December 2008

careers

Some Perspective

December 29, 2008 – 5:34 am

About six months ago I took my first full time job out of undergrad at a major investment bank in NYC. From a few months before graduation, and continuing with an ever increasing frequency since, people have asked if I’m nervous about losing my job. The easy answer is always, ‘no, I think my position is relatively secure’ – and indeed, without going into the justifications here, I think it is. There is, however, always the chance in this market that anything can happen and so I’m aware of the possibility that my job isn’t as secure as it might have been 18 months ago.

In the first few months of my life in “the real world” I spent a night or two lying awake contemplating the different ‘worst case’ scenarios: I lose my bonus and keep my job; I lose my job and get a new one; I lose my job and move in with my parents until I get a new one. I had one eye on Google Finance every day in September and October, and, unhappy with the near-instantaneous refreshes offered by Google’s real time updates, I must admit to on more than a few occasions tapping the F5 key obsessively. “Oh my god!” you might say (and I did), “How do you sleep at night?!” Here is where some perspective kicked in.

I’m 22 years old. My only expenses are rent and food. So my bonus is wiped away? So I don’t buy a TV next august. So I lose my job and find a new one? So I find something new and perhaps a little different to learn about. So I lose my job and move in with my parents? So I take the time to develop my interests while I wait out the job market for some new opportunities.

These are difficult times for a lot of people, and my sympathy goes out to those for whom real life obstacles get in the way of adjusting expectations so easily. I consider myself fortunate to have launched a career at such an historic time. Relatively speaking, I have little material on the line, and so my focus should be on taking advantage of a learning environment that comes around about once a century.

Now I get my market updates from a co-worker who sits in the bullpen adjacent to me. When something exciting happens I can usually count on him to shout it out. If it sounds interesting I’ll check it out on Google Finance. Hours go by (!) without me going to the site otherwise.

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economics

Network Neutrality a Myth?

December 15, 2008 – 6:35 am

With regards to my prior post, further perspective on the Wall Street Journal article:

“Google has been caught red-handed negotiating deals with ISPs to host servers inside the building, just like Akamai does. The semi-technical press thinks this is some sort of a game-changing event:”

http://bennett.com/blog/2008/12/google-gambles-in-casablanca/

“Google caches within an ISP’s network could make Picasa twice as fast as Flickr, Orkut faster than Facebook and so on.”

http://blog.wired.com/business/2008/12/google-blasts-w.html

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economics

The Ruckus About Network Neutrality

December 15, 2008 – 5:34 am

This morning the Wall Street Journal published a story claiming that Google had approached broadband providers with hopes to secure higher quality content delivery services. A concept anathema to most Network Neutralites, Lawrence Lessig is even cited as “softening” his position on NN to allow for this kind of differentiation.

Lessig responds in a post here in which he appears to reject the characterization of his position:

“While broadband providers should be free, in my view, to price consumer access to the Internet differently — setting a higher price, for example, for faster or greater access — they should not be free to apply discriminatory surcharges to those who make content or applications available on the Internet. As I testified, in my view, such “access tiering” risks creating a strong incentive among Internet providers to favor some companies over others; that incentive in turn tends to support business models that exploit scarcity rather than abundance.”

After reading his post I was left confused over his use of the word “consumer”. The question that he was supposedly responding to had more to do with content producers like Google, Yahoo, and Microsoft than with consumers like you and me. I dug deeper to try to understand the semantics and watched an overview of his testimony to the FCC that he gave at Stanford.

The “consumer” Lessig refers to is the content producer after all. Google and Yahoo consume bandwidth just as you and I do. Lessig’s position is that Google should be able to pay a higher price for delivering video content at faster speeds if they want to, so long as all video content sites are offered the same price/opportunity. Further, a site that delivers only text content may not want such high speeds/bandwidth and may opt out of the higher price. He suggests that a parallel is that we pay more for overnight FedEx than FedEx ground.

I recognize that this model does not choke competition or seem unfair for the likes of Google, Microsoft and Yahoo, but I question whether or not this sort of barrier to entry for video startups, for example, is legitimate. If it costs $15MM for a video startup to deliver content in a competitive way, then I would submit that the differentiated pricing model based on Lessig’s “zero discriminatory surcharge” model is inherently unfair, and while it may avoid monopoly, it does nothing to prevent oligopoly. Finally, there is a vast difference between pure movement services (FedEx/UPS/Mail) and network operators. The analogy is more relevant to email services than to an entire system of markets and consumer interaction.

Then again, is this anything other than saying that the advantages of scale are just that: advantages? The most important point, as Lessig says, is that those advantages of scale are not locked in by preferential treatment. This is a thin line we tread.

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