Saturday, October 26, 2002

I suppose it could have been Bruce Wayne

Well, I suppose it is good (or something) to see that Peter Guber is on the Winona Ryder jury.

A day earlier, Guber, on an elevator in the Beverly Hills courthouse, had said casually out loud, "I have about as much chance of getting on this jury as the man in the moon. I only made three pictures with the lady."

Neither Rundle nor Geragos probed Guber for the details of his ties to Ryder. Instead, both pointed their questions toward whether Guber, 60, who now runs Mandalay Entertainment, would feel comfortable sitting in judgment of Ryder.

"Would there be any repercussions for you?" Rundle asked.

"Me?" Guber asked. "No."

"Mr. Guber, you're not afraid of working in this town again after sitting on this jury?" asked Geragos to laughter from the courtroom. Guber indicated he was not afraid.

Friday, October 25, 2002

Yesterday, I failed to attend a screening of Donnie Darko followed by a Question & Answer session with director Richard Kelly. (This was a simple matter of not discovering it was on until after it was sold out). This is very annoying, as the film is one of the most extraordinary and powerful I have seen in yonks, and I would have loved to ask him about the motivations of his satire on the teaching profession, or what was the significance of the giant talking rabbit, and did the world really end. Plus I would have liked to compliment him on the brilliant use of early 1980s pop music: particularly that of Tears for Fears
Perhaps this is a sign of the apocalypse

Two of the films I am presently most looking forward to seeing star Adam Sandler and Eminem respectively. I have to say, I wouldn't have suspected much in the way of interesting films from Adam Sandler, but Emily Watson is one of the finest actresses in the world (please, academy, watch your DVDs carefully and give her that much overdue Oscar this time), and Paul Thomas Anderson is one of those directors who clearly have a great film or two in them. (He hasn't made it up to now, and I doubt he has quite done it with Punch Drunk Love either, but he appears to have made a good film and I am always going to watch what he does.

Okay, I am not that surprised about the fact that I am looking forward to a film from Eminem. You only have to listen to his records to figure out that there is something interesting there. He is technically so good, and if you listen to his lyrics he is so self aware, and, frankly, so hysterically funny, that there was a better chance than with most musicians making films. Therefore I wasn't as surprised as some people when it was announced that he would be making his film with a film-maker whose last two films (LA Confidential and Wonder Boys) have been very impressive. I thought the omens were good even before we started to hear positive news about the film.

I read somewhere that 8 Mile is the first Hollywood film ever to be set in Detroit. This may or may not be true, but even if it isn't it is a demonstration of how Hollywood has neglected the city. The film industry never pays much attention to what goes on in places between New York and Los Angeles, given that Detroit is the home of lots of pop-culturally interesting things (although many of them seem to be more popular in Europe than the US), and given simply what a big and important city it is, this seems an odd omission. (John Cusack’s Grosse Point Blank was mostly set in Detroit (well, in Grosse Point) but does that count as a "Hollywood Film"? And where was it actually shot? The IMDB indicates locations in Los Angeles, Chicago, and Detroit, so it may just be they did some second unit world in Detroit). Plus for the last couple of decades the actual city of Detroit has been full of wonderful, run down abandoned buildings which in many cases should be amongst the treasures of 20th century architecture. One would things that some of these would make stupendously wonderful film locations. Many of these buildings are now all getting demolished to make way for new development, so the opportunity is being lost. It will be interesting to see if 8 Mile takes advantage of this to any extent. From the review it rather sounds like it does, so I am looking forward to the movie from this point of view, too.

I have a feeling that Eminem may end up being one of those stars who last: like Bob Dylan or Elton John, or Madonna. Some artists for whatever reason have a certain power about them. Eminem is one of them. I think he is going to be one of those people who is still very famous and is still making interesting records (and probably acting in interesting films) in 20 years time. I doubt that the reactions of horror to him are any different at core to the reactions of horror at Elvis. (Hey guys, he is mostly speaking in character.). We shall see, anyway.

Archives for October were not appearing on the archives index . This is now fixed.
As I had thought was likely to happen, Arts and Letters Daily (and its all important archive) is back.

Thursday, October 24, 2002

There is a good piece on UPI by James Bennett (via Instapundit ) discussing what Australia's options are now after the Bali bombing. The basic point is that no, Indonesia is not going to go away, and it is foolish to try to pretend that it might. It's worth a read. Plus there is the issue of the Balinese.

WASHINGTON, Oct. 18 (UPI) -- Because our media has predominantly featured the Australian, British and other Western victims of the radical Islamist attacks on Bali, it is easy to forget that the primary intended victims of the assault were the Balinese themselves. To the extent that Australians and other non-Balinese were intended victims, it was primarily for the purpose of destroying the Balinese tourist industry. Killing Westerners was a tertiary, albeit welcome benefit in the eyes of the jihadists.

For them, the root cause they seek to fight against is not Israel, or Afghanistan. It is Christian "infidels" and Balinese "idolaters" polluting the Land of Islam, of which, in their view, Bali is part.

I am not actually sure I agree with this. I think that probably the attack was principally on westerners, and specifically on Australians, and that the Balinese were the side damage. It was an attack on Australia at least partly because of Australia's support of an independent East Timor. Now of course, East Timor is one other "non-Islamic" part of Indonesia (or at least "Indonesia" as perceived by the Indonesian army) in which the non-Islamic people were massacred for 30 years before the Indonesians were kicked out. But it doesn't matter much. The terrorists clearly wanted to do both things, so which was their primary aim is perhaps not the point.

Based on the Taliban experience in Afghanistan, we have a pretty good idea what the Balinese can expect should the radical Islamists fulfill their plans to take power in Indonesia. Bali's temples and religious monuments representing its unique blend of Hinduism and Buddhism would be destroyed -- remember the Bamiyan Buddhas -- and replaced with plain whitewashed mosques. Balinese music would be outlawed and their instruments destroyed. Those who resisted conversion to Islam would have to wear an identifying symbol such as a saffron patch on their clothes at all times. The Balinese tourism industry would be destroyed and the island, now poor but developing, would be plunged into primitive semi-starvation.

The Balinese understand this, and for the time being fervently support the national government, which preserves the traditional accommodations between Balinese and Muslim Indonesians. Should the government lose coherence, their only hope would be independence with foreign support which, as East Timor demonstrated, would be a very problematic option.

In the case of Bali, it would be impossible. Whereas Timor is a reasonably remote Indonesian island, Bali is right next to Java, in the sense that you can see Java across the strait easily. There are a few million Balinese, and 100 million Javanese. Foreign support for an independent Bali would be like foreign support for an independent Tibet. While a sense of justice might demand it, the facts of geography rule it out. To be truthful I find it astounding that Bali has retained its unique character. Traditionally the Balinese have accepted Javanese rule, and in return the Javanese would largely leave Bali alone. My gut feeling has been that if it has lasted this long, it will continue to last. (On the other hand, the Bamiyan Bhuddas lasted in Afghanistan for over a thousand years, before being blown up by the wretched Taliban, so maybe he is right).
In my native land of Australia, titles of French films are normally translated into English. That is, A bout de souffle was released as Breathless , A ma Soeur! was released as Fat Girl and La Ceremonie was released as A Judgement in Stone . This seems to often be the case in the US, as well. However, in Britain, they are usually released under the French name. This might or might not suggest that the British are more, pretentious, or simply that they speak better French. Or simply that they do this out of habit, and it means nothing.

However, in Germany it seems that English language films are generally released with English titles. This is fine. However, they don't always seem to keep the same English title that the film had when released in English language countries. If the title contains subtlety, or a play on words, or something that Germans are unlikely to be able to easily translate, they may go for a different English language title. As an example, a charming little British film called Bend it Like Beckham was successful in the UK earlier this year. It is about and Anglo-Indian girl who grows up and resists her mothers desire that she become a proper Indian young lady, because instead she just wants to play for a local girls soccer team. She wants to be able to learn to bend the ball like England and Manchester United captain David Beckham (one of the biggest celebrities in the UK, and famous throughout the footballing world). However, it was presumed that many Germans would not have good enough English to get this subtle usage of the word "Bend" so the film was released in Germany, under the English title Kick it Like Beckham . "Bend" may be a problem but "Beckham" translates into German just fine.

What I am wondering, however, is what title will the film be released under in the US. The whole title seems untranslatable into American.

Wednesday, October 23, 2002

There is a scene in the original radio series of The Hitchhiker's Guide to the Galaxy in which Douglas Adams describes how in some circumstances a preponderance of shoe stores which all sell shoes in a single size drive out all other businesses. Something called "the shoe event horizon" is reached and civilization collapses (or something like that). This was apparently written when Adams was in a rage about having spent a whole day going from shoe shop to shoe shop but being unable to find a pair of shoes anywhere that would fit. This scene was scaled down to a fraction of its size in other versions of THHGTTG, which were written when Adams was not in such a rage.

Last week, after a particularly irritating check in experience at London Stansted airport, I got out my laptop and wrote about it when I was sitting on the plane. The resulting 1500 word rant is probably long and boring to many people. But since this is my blog and I do not have an editor, I will post it anyway.

I am in Germany for a couple of days, having purchased one of these extremely cheap airfares that now exist due to the European single market. When travelling for just a couple of days, I travel extremely light: just a tiny backpack with a change of clothes, a camera, a toothbrush, enough reading matter to last me a month, and a mass of electronics with an assortment of power adapters. My laptop was bought in Australia, and has an Australian power plug. In Germany, I plug it in via an Australian to British adaptor which in turn is plugged into a British to continental European adaptor. (I did have an Australian to European adaptor, but it was lost somewhere in the low countries). My cell phone was purchased in Britain, so it only has to go through the British to European adaptor. (I would like to have a Sony Micro-MV format digital camcorder as well, but the 1500 pound cost of one of these will have to wait until I get a job).

In any event, I travel light, and for short trips I carry only hand luggage. This presents a problem post September 11 if I am not careful, because I like to carry a Swiss Army Knife with me. If I don't have any checked baggage I cannot put the kinife in the checked luggage, and it will be confiscated. When on my way to Turkey in June, I was delayed by a varietyof factors, and I ended up having to carry my checked luggage all the way to the gate in order to make the plane. This meant I had to take it through security. This meant my Swiss Army Knife was confiscated, despite my best efforts.

Anyway, the long and the short of it is that in the check in line on my way to Germany, I realised I had my Swiss Army Knife in my pocket. I briefly considered checking in my one bag, but no, I was not putting my laptop in the hold of the plane. I then had an idea, went to W.H. Smith and purchased one of those postage envelopes with the plastic bubbles inside (known as a "Jiffy bag" in the United Kingdom, for some reason I do not understand), put the knife in it, addressed it to myself, put what was hopefully enough postage on the envelope, and attempted to post it. I took it to a nearby post box and attempted to post it. Problem solved. The person who sold me the envelope looked at what I was doing, and commented that the security precautions were so ineffective that I would probably have got it on the plane anyway. Problem solved.

Well, no. The postbox was designed specifically so that its slot was only 5mm wide, and therefore it could only take ordinary sized enveloped. (Presumably this was to make it hard to put bombs in the post box. Or possibly Her Majesty's Customs have a great selection of Swiss Army Knives and want to foil my attempts to prevent myself from adding to it). The Swiss Army knife in my envelope was probably 15mm wide, so there was no way it would fit.

At this point I was determined not to lose another Swiss Army Knife. The thought of hearing my mother's displeasure as she discovered that I had lost another Swiss Army Knife to airport security went through my head (if I told her). To lose two would definitely look like carelessness. Therefore, I contemplated doing something bad. Well, not actually bad in the sense that it could actually hurt anybody. (Let's face it, I wasn't planning on hijacking the aircraft). I thought about how to rearrange my bag in such a way that the knife would be least likely to show up on the X-Ray machine if I carried it on. I did in fact rearrange my bag to ensure this. (From looking over people's shoulders, I know that my laptop casts a large shadow on the X-Ray machine. The trick is presumably to place the knife in this shadow somewhere). Possibly someone was watching me on airport closed circuit television and they would have surrounded the security check point with guys with machine guns so as to prevent me from getting my knife onto the plane. (The scene in one of the "Airplane" movies where guards violently push a little old lady against a wall and frisk her while four or five guys wearing military fatigues and carrying machine guns and ammunition belts walk right through comes to mind here). Anyway, having done this, I was walking nervously through the terminal towards the gate. I saw another postbox. I thought that it would be the same as the first. But no, it had a much larger slot. As to why one postbox would have a narrow slot to foil terrorist bombs but not the other, I don't know. Perhaps losing one postbox to terrorist bombs could happen to any airport, but losing both would look like carelessness). I opened my bag, took the knife out from its perfectly concealed position behind the laptop, put it in the jiffy bag, and posted it. Presumably, when I get home, I will find the empty envelope with a letter from the Royal Mail telling me that the sending of knives through the post is prohibited and it has been confiscated. (Update: I actually did get my knife back).

Risking being machine gunned as a potential terrorist (or, more likely, seriously arrested. (Or more likely than that, given a stern warning and a full cavity search)) for a knife that I had bought in Amsterdam for 20 Euros was perhaps not a wise potential tradeoff for me to have made. But I nearly did. One thing that this might suggest is that I simply catch the train. When I brought the knife back from Amsterday through the Channel Tunnel, my luggage was X-Rayed but there was no trouble carrying the knife. Presumably it is hard to hijack a train with a knife and then crash it into a large building.

(That said, it is worth some time watching the movie Death Train, featuring Patrick Stewart, Pierce Brosnan, and a woman who was once in Baywatch who in the movie is supposedly an expert sniper trying to foil generic Russian terrorists who have hijacked a train in Germany and who are demanding that they be given clear passage to allow them to take the train to Iraq. (Yes, really. We are initially led to believe they are only slightly less implausably trying to take it to Serbia, but that turns out to be a ruse). Admittedly, in this case the train has been hijacked with a nuclear weapon rather than a Swiss Army Knife, which makes the plot either more or less silly depending on how you look at it. Either way, dumbest movie ever. One does wonder how this could be worked into the "Saddam Hussein is trying to obtain weapons of mass destruction and therefore we must invade his country" argument if it really happened, though).

Seriously though, as many people have observed, these security regulations are excessive and silly. They are not going to stop any more genuine hijackers than did the regulations in place before last September. People who want to get sharp objects onto an aircraft will succeed in doing so, because there are simply too many sharp objects. (I did carry a disposable razor and a glass mirror that are in my shaving kit onto the plane without difficulty. Certainly I could fashion a crude but effective weapon from those if I wanted to. However, even if terrorists do get sharp objects onto a plane, they are unlikely to be able to hijack a plane with them. The September 11 plot worked because the procedures then in place were that in the case of a hijacking you don't attack the hijackers and you wait for them to make demands, which they will. These procedures are no longer in place, and nobody will every treat hijackers like that again.

However, the regulations do cause utterly harmless people like me to contemplate breaking the law, to risk being caught by airport security. This isn't good, potentially because it can waste the time of said airport security, and secondly because having laws that reasonable people think about breaking as part of their everyday business are bad laws almost by definition. They lower respect for the idea of law in general, and this is not good.

I could now launch into a savage attack on present day intellectual property law, but I will refrain from that for now. (My fingers are crossed for a good result in Eldred vs Ashcroft, however).
Which side is the slayer on?

I don't know about Buffy , but I am sure Giles is in favour of the war. He certainly knows when to be ruthless.

Tuesday, October 22, 2002

It is clear from reading the press and from talking to people in coffee shops that Starbucks are in the process of preparing for an assault on Europe resembling that of 1944. Britain has been deluged with Starbucks stores for several years now. Starbucks have set up the infrastructure for a continental assault, and they are just beginning their push into a few markets. Their strategy (which I saw in Australia a couple of years ago) tends to be to carpet bomb cities, to continue the analogy. They might set one shop up for a few months before all the rest, just to feel out the idiosyncracies of a new market. Then they will go from one store to 20 stores in a city in what feels like a few months. They seem to have gone to the "just feel out a market" stage in a few European cities (Vienna, Berlin, Zurich, Barcelona, Madrid). Watch for the number of stores to increase dramatically in the next twelve months.

One interesting precursor is the "Starbucks clone" phenomenon. In cities of the world where Starbucks have not yet entered the market, somebody else will set up coffee shops that copy Starbuck's business model as closely as possible. I have written about this before: "The Seattle Coffee Company" in the UK set up Starbucks like coffee shops, and the easiest way for Starbucks to enter the market was for them to simply acquire the chain along with its suppliers and logistics. I have seen these in a few other places: I saw one or two Starbucks clones in Amsterdam earlier this year, but these were independents rather than chains.

However, in Hamburg last week I have seen the most extreme chain of Starbucks clones I have ever seen. These were called "Balzac Coffee". (The classy thing to do would be to name the chain after a character in Typee, but they didn't appear to have managed that. They had a circular logo of the same size as Starbuks, hanging in the window in the same way. (Although it was brown instead of green and wasn't nautical. They had the same mix of bagels, pastries and cakes in the identical sort of counter cabinet that Starbucks uses. They had the same mixture of comfortable sofas and chairs and slightly more serious upright chairs and tables. The tables had the same, not quite chessboard look you see in Starbucks. They had the same sorts of large, glass mounted "exotic coffee" pictures on the walls. The staff wore uniforms that were almost identical to those worn by Starbucks staff (although again brown instead of green). The choice of coffees was very similar to Starbucks: the hot and cold drinks, the brewed "coffee of the day". The boutique coffee machines and boutique coffee for sale. Large pictures of coffee growing in exotic locations on the walls. Everything. Somebody had gone to immense trouble to clone the operation exactly. So exactly that in some countries it would be asking for a lawsuit due to trademark violations.

What of course was interesting was that to turn this into a Starbucks, all you actually need to do is to change the fonts on the menu board, add a few trade marked words such as "Venti" and "Frappuccino". change the logo to something nautical, issue green aprons to the staff and bingo: Starbucks. There seems little point in cloning the operation merely to create a successful business. Starbucks have a good business model, but there is no need to be this obsessive about it. It looks more like an attempt to set up a business to be acquired by Starbucks, and the reason the model has been copied so exactly is to minimise the cost of converting the stores. It will be interesting to see if Starbucks will take (or have taken) the bait.

The positive of all this is that Balzac Coffee do in fact make good coffee. Decent coffee is hard to otherwise obtain in Germany. Starbucks will make a killing in this market (as they have in Britain and Japan). I would guess that in the longer term they will also make a killing in places like Poland and Russia. Whether they will in markets such as Italy and France, where the coffee is much better, remains to be seen. That said, Starbucks' entry to the Australian market seems quite successful, and there was no trouble buying a good cup of coffee in Australia prior to their entry to the market. Australia received a lot of Italian immigrants in the 1950s and 1960s, and as a consequence good coffee became all-pervasive. In Sydney and Melbourne you can even obtain an excellent latte in a Chinese restaurant.
Well, we have an article in Wired on the industrial zones on the Pearl River estuary. This must have gone to press at almost exactly the same time as the one in the Economist. It's probably just a coincidence, but given the anonymous authorship of articles in the Economist, it is hard to tell.

Monday, October 21, 2002

This has taken me longer than I said it would to write and post. My mind has been on issues of terrorism rather than telephones. Plus I have had endless blogger/blogspot problems which means I seem to have typed most of this several times. Perhaps I should move this blog somewhere else. Anyway, apologies.

Last week, I was sitting on a wharf beside the River Elbe in the Blankanese district of Hamburg. It's a mighty river. Large container ships go past to the Port of Hamburg. A college friend of mine who lives in South Africa happens to have been born in Hamburg, so I sent him an SMS text message from my GSM cellphone. I also sent a message to my sister in Austalia. This cellphone is registered with a British network (Orange, which actually now owned by France Telecom, although is was owned by Mannesman of Germany and before that Hutchison of Hong Kong). It is on the simplest prepay tariff, which I use because I do not know how long I am going to be in the UK and I do not wish to commit myself to a fixed term contract. However, there is still enough interoperability and roaming in place that I can sit beside a river in Germany and send text messages to people in South Africa, and receive replies a few minutes later. I was impressed. It is possible to buy a wireless communications device for 50 pounds that will allow me to send messages to another one of these wireless devices over much of the world.

Roaming and interoperability is of course what GSM got right. The GSM standard, with its system of portable SIMs and phones that could be easily moved from network to network and which could be used with different numbers and network accounts was a nice, elegant piece of work. However, the creators of this system didn't just get it right technically, they go it right logistically as well. Right from day one there was a central clearing house set up to make roaming from one network to another and the associated billing as easy as possible.

The downside of this is that my little exercise in which I sent and received a few text messages while sitting next to the Elbe cost me several times as much money than it would have if I had been sitting next to the Thames. My phone was not in its home country, and I was therefore being charged "roaming rates". If I was actually using the phone for voice calls, I would again be charged very much more than would be the case at home, and (horror of horrors) I would be being charged for incoming as well as outgoing calls.

As to why charges are so high, the telcos have a number of justifications.These come down to the fact that when you are roaming, the infrastructure of two different networks is being used, this is tricky and so it should be expensive.

In actual fact, the key issue is simply that the charges for roaming are largely decided by the company that owns the network you are roaming to. They pass the charges on to your home network, which adds a markup and passes the charge on to you. As you are not a regular customer of the network you are roaming on, this operator generally feels it can rip you off beyond words without being terribly concerned about the loss of future business. Those customers who do regularly visit the same countries are normally business customers who do not pay for their calls themselves and therefore are not very price sensitive anyway.

As to whether this makes sense, we need to look at what is going on. There are two kinds of roaming call:

1. Outgoing calls. You are in a foreign country and are making a call (to anywhere). The foreign network picks up the call and then passes it on to the destination. At the end of the call, it passes billing information on to your home network, and the cost of the call appears on your next bill. Your home network is involved only in terms of billing. From the point of view of the network, there is little difference between this and handling a call from one of its loval customers and an international customer who is roaming, except that billing informaiton needs to be sent to the right place at the end of the call.

2. Incoming calls. In this case, my phone's home network is in country X, and I am roaming in country Y. When someone wants to call me, they call the phone's number in country X. The network has to figure out that the phone is roaming in Y. It then has to open a line to country Y, and the network in country Y connects the call to the phone. This is more complex than an outgoing call situation, as the call has to be routed via country X regardless of the location of the caller. (In addition, the network in country X has to keep track of the fact that the phone is in country Y in order that the connection be possible). Even if the caller is in country Y, the call has to go via country X and back, because the phone's number is native to that country. Plus of course billing information needs to be kept track of.

Incoming calls are certainly more complex than outgoing calls, and both networks are involved in the call rather than just in billing, If you are going to charge a premium for roaming based on actual costs, you would therfore expect incoming calls to be more expensive than outgoing calls. Right?

In practice, quite the opposite is the case. The cost of outgoing calls when roaming is horrific. The cost of incoming calls is more reasonable. The reson for this is simply that prices for outgoing calls are generally set by the network you are roaming to, whereas those for incoming calls are set largely by the country you are roaming from. The charge for an incoming call has generally been negotiated by your home network, and is generally based on the cost of calling any other mobile in country Y from country X. Your home network is less likely to rip you off, and so this works out cheaper, even though it is more complex.

The deal with international roaming is simple. Telcos are charging what they can get away with. European mobile companies make more than ten percent of their revenues from roaming, whereas it makes up a much smaller fraction of total minutes. They charge what they can because they can get away with it. (To really see this in action at its worst, one only needs to take one's phone to a third world country. The rates one is charged in, say, Indonesia, make the European rates look reasonable).

I was arguing the other day that the benefits of the EU's single market are very large, and should not be forgotten by people who are going to (generally quite justifiably) criticise the EU. Telecommunications, however, is an area in which the single market is not working very well. (At least, not yet, as Obi Wan might say).

Superficially, telecoms and international aviation have certain similarities between them. Traditionally, the international forms of both industries have been regulated by bilateral treaties between nations, and traditionally the international business has been dominated by often state owned monopolies and duopolies. One effect of the single market should be to transform the international aspects of these businesses into essentially domestic businesses. In the case of aviation, this has happened, but not through the traditional companies. What you have had is the traditional businesses attempting to keep operating by their old business models. When they have tried to operate by the new ones, it hasn't worked. (British Airways have attempted to operate domestic airlines in France and Germany, and to set up a London Stansted based discount airline, but the culture of the company has not been to get them to work). However, the barriers to entry aren't large, and new companies have come into being to take the slack.

In telecommunications this hasn't happened nearly as much. Yes, the cost of international calls has come down for fixed phones, but even with the cheapest carriers , it still costs significantly more to dial Paris from London than it does to dial Glasgow. Still, it's possible to call Paris for 4 pence a minute, which isn't much, so plenty has been achieved. Part of the problem is that we still have a numbering system in which dialing a different country requires dialing a different kind of number to dialing a domestic one. It feels you are doing something different, so it is possible to get away with charging something different.

However, with mobile networks the situation is far worse, and this comes from the fact that networks were explicitely licensed on national grounds. Steven Den Beste was the other day discussing the fact that in the US, a vast number of small cellular companies have basically now evolved into four national networks (AT&T, Sprint, Verizon and Cingular). This process hasn't happened nearly as effectively in the US. This seems to be due to the fact that, counterintuitively, licences in Europe were issued to cover larger areas. Whereas in the US cellular licences were originally sold on a market by market basis, and there were a huge number of smaller markets to merge together, in Europe licences were generally sold on a national basis. Most nations have three or four GSM networks. (The EU has required each country to have at least three). Typically, one or two licences were issued for analogue services in the 1980s, one of which was given to the incumbent government telecommunications monopoly. In the early 1990s these operators were given GSM licences and a couple of new operators were licenced for GSM. For instance, in Britain, there were two analogue operators. (Britain is quite typical. There were two analogue operators (BT Cellnet and Vodafone) who later upgraded to GSM and were joined by two new entrants (Orange and One2One). In any event, networks were national, marketing was national, a roaming structure came into being that was based on the idea that roaming calls were an ultra-expensive luxury.

Over the years, these operators became successful, and tried to expand. European law (at least from 1993) allowed these operators to buy one another without restriction, but in a market where lots of companies were state owned and national governments wanted to protect them, this was hard. Lots of companies bought minority stakes in other companies, but full mergers were relatively slow in happening. They did eventually happen, but still, nobody has what could be described as a comprehensive European network. The closest we have is Vodafone, which has networks in Germany, Greece, Ireland, Britain, Italy, The Netherlands, Portugal, Spain and Sweden (only listing EU countries) and a variety of minority stakes. Vodafone is presently trying to take control of the SFR network in France, which has come on the market due to the collapse of the Vivendi Universal conglomerate, and it looks likely to do this. Other operators are rather less advanced. O2 (the former BT Cellnet) has networks in Britain, Germany, Ireland and the Netherlands. Orange (which belongs to France Telecom) has networks in Britain, France, and Denmark. T-Mobile (formerly Deutsche Telecom) has networks in Britain, Germany, The Netherlands, and Austria . None of these networks are complete, and roaming to networks owned by other people is therefore still important if you are going to offer a complete service to your customers.

Ideally, what we would like is for these companies to more or less complete their European networks, and then offer customers tariff plans in which the rates paid when the phone is outside their own country are the same as for calls made inside it. Ideally, there should be no charges for incoming calls in either case. It may be that call charges on such a plan would be slightly more than on a conventional domestic plan, and it may be that to call such a phone, people would have to dial a non-gegraphic number that cost slightly more to call than a domestic number. The main issue is that call charges when roaming should resemble a domestic tariff. Given that when a company such as Vodafone builds a pan-European network it should be able to do such things as integrate their billing system, this would be a much better reflection of costs than the present roaming system anyway. In a competitive market, economic theory would tell us that this is how tariffs would end up anyway, but sadly we do not have a competitive market. You would expect the first company to adopt such a model to gain a lot of market share, but the longer term result would be an erosion of margins. As it is, we have a set of sick, overindebted companies that lack the flexibility or desire to change their business models.

In the aviation market, barriers to entry turned out to be fairly low, so although the existing carriers weren't flexible enough to change, new carriers arose to take advantage of the new market. In mobile phones, barriers to entry are total. There are no new GSM licences being issued, and the only new mobile licences are for 3G licences for a technology that doesn't work. Therefore, the existing carriers oligopoly isn't threatened.

In defence of the EU here, the competition authorities of the European Commission are aware of this, and an antitrust investigation is ongoing into the high cost of roaming charges on mobile networks in Europe. Investigators have been arriving at telcos at seven in the morning and demanding access to documents and computers. I don't think it is so much the EU as the national governments who are the obstacle here. The trouble is that the forcing roaming charges to be closer to costs would weaken the financial position of Europe's telcos considerably. Given that their financial position is already generally dreadful due to the huge costs of 3G licences and equpment, most EU governments would prefer that this not happen. Given that in a lot of cases they seem determined to bail out their (in some cases still partly state owned) telcos, and this would make the job harder, there is ultimately likely to be a lot of political resistance to this. However, bailouts are a bad idea. They just prevent innovation, and if Europe had a lead in mobiles, they are going to allow it to become further eroded.

Thus we have a situation where consumers are being ripped off , the market is completely scherotic, and there are huge political obstacles to any reform. Once again, the circumstances of the European mobile market appear pretty dreadful.

Sunday, October 20, 2002

And if ordinary job interviews aren't humiliating enough for you, there is this .
Virginia Postrel quotes Sean Kinsell from Japan.

CNN Asia covered it very thoroughly last weekend, when there were only sporadic updates and the death toll was steadily climbing from "about 140 people, some of whom may have been foreigners" to what we now know. I can't claim to know a representative sample of Westerners in the Pacific Rim, but even among the diehard (as it were) pacifists I encounter frequently, the reaction is very charged. The WTC represented capitalism. That meant that even though in reality it gave jobs to thousands of poor immigrants, both the left and the right who think the money economy evil could see it as an attack on a particular aspect of our civilization that they dislike. And of course, the Pentagon is central command for the Military-Industrial Complex.

But Bali to a lot of people still represents an art-centered, peaceful paradise in the middle of contentious Indonesia. It's where backpacker types averse to the money culture can indulge their soulful side while providing a living for the nice natives. And it definitely isn't the place to go looking for victims if your issues are specifically with America.

There is a fairly mobile expatriate culture throughout Asia. It consists of people who are comfortable moving from country to country, and culture to culture. East Asians themselves (particularly the Japanese and Koreans) are often not comfortable with this sort of cross cultural experience, so the sort of jobs that involve this sort of thing tend to fall to others. This expatriate community contains Europeans and Americans. It contains lots of Indians, too, especially in IT roles. It contains lots of Australians. This is due to the proximity of Australia, and is I think also due to the nature of Australians. As I wrote last week, we are not Americans and we are not Europeans. We have certain doubts about our identity. This is I think one factor in why are so obsessed with beating other countries in sporting contests, and I think it is a factor in why we travel so lot. In any event, we fit well into that East Asian, country to country expatriate thing. This is a culture of skilled people who possibly don't quite fit in at home, and who bring western expertise to poorer and more isolated countries, and who build things. (The spirit of this is captured wonderfully in this article by Neal Stephenson. It's six years old and very long, but well worth a read). It is generally a culture of people who work hard, drink hard, and party hard, and have a slightly cynical and world weary quality at times. You meet them in bars in certain districts of Asian countries. And you meet them in bars in airports. Clive James was sort of describing this

A few days after the towers collapsed in New York, I flew east myself, from London to Sydney, thence to keep a speaking engagement in Adelaide. I flew by Malaysia Air, on a flight in which the crew outnumbered the passengers. The transit lounge in Kuala Lumpur was where I had my revelation. There was a prayer room for the faithful and an open bar for the rest of us. The two schools of thought were getting along fine, but it wasn't hard to imagine another breed of traveller who wouldn't stand for it. Here was an obvious target, and there were plenty more on the way to Australia, including the whole of Indonesia, where the fundamentalists were getting a lot better hearing than they were in Malaysia, but only because the Indonesian government was even more scared of what they might do.

and certainly given the amount of Asian travel he has done, it's a culture he is familiar with. James isn't the same kind of expatriate, but he is one just the same. He has the type of global view that expatriates have. (As for instance, does Ian Buruma (who is a complicated cultural mixture, who again has travelled in Asia and written about it a log). This type of thing comes across in his books as well).

I don't think it is a coincidence that these are the two people writing clearheaded stuff for the Gaurdian. The expatriate experience illustrates what is at stake in this war pretty well. Bali is full of bars full of expatriates: it is the place they come (at least came) to unwind between jobs. And in a sense this bomb seems an attack on the expatriate lifestyle. These are western, crosscultural people, who are helping some of the poorer countries of Asia to modernise and westernise. They like to drink beer and party. A lot of them died last week. And in their murder it becomes clearer what it is the islamofascists hate. It isn't America so much as what America stands for. It isn't capitalism even. It is the secular, modern world itself.
There's a good piece by James Fallows in the Atlantic Monthly discussing what America is likely to have to do in Iraq after they invade, and how difficult it is likely to be. (Plus it gives some history of the place). Well worth a read.

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