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New Policy in Support of Business Development: “Embracing” a cloud? Matthias: lots of definitions, but substance: hardware, software, server; how much centralized or decentralized intelligence do we need? Storage facilities? Seems to be more efficient for industry to be decentralized. Tony: lot of hype, doesn’t exist absolutely, was an engineering term. Questions: who pays and how wide spread is it? Is related to debate on digital divide, treat it like water. Eli: it’s been around, but because things are slow in short term they won’t be slow in long term. (*) as a service helps reduce costs, for consumers it helps reduce a lot of incompatibilities (phone needs to work with TV, etc.), will resolve if we make those things a service.
Policy on privacy and security: Eli: with respect to FCC, this is tip of iceberg. Privacy and security are two of larger group, including who can do what (cloud neutrality), media broadcast & control, off-shoring, sovereignty, payment imbalance issues, domestic ownership, market power, network services and bundling (antitrust), who are cloud stewards, taxation, and more. May call for more regulation.
Is trust, security an insurmountable issue with enterprise data? Matthias: Is a burden for industry, lots of press coverage, concern for telco companies; data breaches undermine credibility. Data protection and security can’t be given over to the cloud. Example: public officials being prosecuted, ongoing research, Google and China; where is power being accumulated? Where are strongholds? They don’t transfer. Sarkozy expressed concern that servers are no longer in France. Need sensible balance of regulation. People like the services, amazing what kind of info is in Facebook.
Tony: New Zealand is a different market, is uneconomic to build out servers/services where there’s no return. Australia spending $43-45B to cover country. Governments exist to make rules. People think the Internet is freedom but governments don’t like that. Regulations stifle innovation, so there may be regional clouds. Eli: Regulating dumb pipes and privacy issues, cloud to cloud interoperability, trans-border data flow will need to be addressed, balanced.
Recreating national phone companies to manage data and flows? Matthias: It’s not really the phone company business, which is more a physical ownership. Policies need to be done step by step. Transparency, data ownership, agreements need to be formalized (no need to invent new, needs to be adjusted to modern technology). Relationship with customer, those companies have responsibilities and need to comply with legal issues. We need to define who’s responsible for what, also need a new overflow of regulations to help guide. Tony: Customer relationship is key. Biggest advantage for cloud: Google. Do they actually have a customer? It’s the telco or ISP. How can we expect to have distributed service providers comply, where does that information go? Telco doesn’t have the relationship, they’re pipe suppliers. Matthias: Constitutional discussion: storage obligation to store everything for six months. Carrier says we won’t do this. Who pays for this, and what dangers? How do we trace back dynamic email addresses? Is system appropriate for that? Many issues are mixed. Eli: What is the role of classic incumbents in this? They’re also competing with own customers in areas of pricing, bundling, squeezing. If the network becomes “dumb” they will be excluded from providing these services.
National security issue as another factor that draws government in? Tony: it’s always an excuse. Governments like to think they maintain sovereignty, but they must interact. Voice has in the past paid for cables, now it’s a tiny bit of traffic. As you get to application providers, they take the vast chunk of the revenues. Economics of the Internet are still evolving, basic telco is on decline. They can’t provide a free network. Similar to airline industry. We keep trying to put old model into new technologies. Need to break the mold of that thinking, work more closely with application providers. Eli: $300-400B spent on top of spectrum payments, add to what consumers put in (routers, etc), you have $1T investment into broadband. Infrastructure investments likely to peak then be flat for next few years, then begin decline. Fiber and investments (wired and wireless) will have been made, nothing seen on the horizon to make significant change. Matthias: Highly populated metro areas are where networking can be done economically. Margins lower but still sensible business model with IPTV over telco, cable companies offering phone services. New entrants need to fight hardest because they’re squeezed between incumbents. Rural areas – how does it work there? Needs to be a discussion in this area. Satellite may help, might need roll-out by government, other private solutions need to be explored before seeking government solutions. Tony: Some nations don’t have ability to have part of the cloud, lower population base. As it grows, you’re going to leave people behind. Cloud will result in larger digital divide.
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