Monday, March 26, 2012

Supreme Court Hears First Arguments on the Affordable Care Act

Article first published as Supreme Court Hears First Arguments on the Affordable Care Act on Technorati.

The United States Supreme Court began hearing arguments today concerning the constitutionality of the Affordable Care act.  This is the beginning of a 3 day process where the 9 justices will hear arguments related to whether the act violates constitutional protections. 

Today's 90 minute oral arguments  concerned whether or not the Supreme Court could even hear the case.

At the center of the arguments was the definition of a tax as it pertained to Supreme Court jurisdiction  and whether the penalty for non-compliance constitutes one .  If the court finds it is and agrees with the 4th circuit court's lower ruling that the penalty is a tax based on using the IRS as a collection mechanism then all further arguments could cease.

That end would come about because under the Tax Anti-Injunction Act of 1867 or AIA, a challenge to taxation can't be heard until the tax has actually been levied.  Since the Affordable Care Act's mandatory compliance provisions don't come into play till 2014, the challenge would have to wait till the 2015 tax filing season when the first penalties had been assessed.

Arguing that the AIA was applicable to the case were Gregory Katsas  Former Bush Administration justice department official and Robert A. Long former assistant to the United States Solicitor General .  Arguing the federal Government's position that the penalty is not a tax was U.S. Solicitor General Donald Verrilli.

The Tax Anti-Injunction Act came about to prevent plaintiffs in a federal tax case from receiving benefits derived from not paying the assessment while the case was ongoing.  Instead the tax is expected to be collected when assessed with plaintiffs then filing for refund.  Suit can then be filed if the IRS denies the refund which would provide the necessary foundation to bring a challenge to the tax law itself.

Tuesday's scheduled oral arguments will consider the constitutionality of the individual mandate itself.  Wednesday morning's oral arguments are centered around whether the rest of the Affordable Care Act is legally viable if the mandate is stuck down. 

The final arguments are scheduled to be heard on Wednesday afternoon and concern the challenge made by 26 states to the act's Medicaid provision.  This part of the Affordable Care Act would force expansion of the state run Medicaid programs to individuals not currently covered by the program.  The state's argument claims the provision would negatively impact budgets and amount to an debilitating federal mandate. 

Monday, March 19, 2012

Google NBC

Recently I wrote an article about Google's recent hiring of Kevin Rose and expansion of their premium content channels on YouTube.  In that piece I commented on the concern of independent content providers that Google may be making a push to become the dominant player on the Internet.  In essence a content gatekeeper minimizing all other outlets.

While questions remain as to whether it's proper or even an anti-trust issue for Google to operate in both the content and search spaces it's important to keep things in perspective.

Let's face it, what lands in Google's premium channels will still have the restrictions of the medium to contend with not to mention varying degrees of production quality.  Couple that with the basic fact that the majority of popular video content on YouTube is for all intents and purposes, garbage.

I watched the IAWTV(Intl. Academy of Web TV) awards a few months back.  Aside from the one news related program nominated that I was interested in, the rest of the nominees never rose above the quality of fan films. Much of it reminded me of those awful videos made in high school multimedia classes.  The common thread among many of the nominees was YouTube, with the notable exception of the news program that I was interested in. 

When you've got content like this...

I wouldn't worry too much about Google crushing the Free Internet. 

I'd be far more concerned about providing good programming than a giant monolith betting on pet videos and B list talent to corner the content market.  The Internet is a fickle beast and those who seek to control its destiny soon find themselves on the sidelines.  That an Internet company like Google would think otherwise seems unlikely. 

The medium lends itself to specialized content for very distinct audiences that can number in the thousands if not millions. Google sees that as a potential cash cow but that's a very traditional view of media.   Internet consumers tend to distrust singular sources for their information and always prefer an a la' carte experience to the combo deal.  Unlike television, your audience isn't captive and always finds a way to bypass you if you don't meet their needs.

I'd cite the recent examples of Myspace and RIM for those who thought otherwise.  If Google does become the next Internet NBC it's a safe bet that other alternatives will surface shortly thereafter and relegate Google to the ranks of Alta Vista.

Deal of the Week

Google Making Major Moves in the Content Space

Article first published as Google Making Major Moves in the Content Space on Technorati.

While partaking in a daily allowance of Internet broadcasting the other day there was news of some apparently notable maneuvers by Google.

The rumored acquisition of Kevin Rose of Digg and Revision 3 fame  by Google last week was confirmed Sunday with he and his staff at the recently idled (creator of the Oink app) being hired for an as of yet undisclosed project. 

Close on the heels of that development was news of the imminent launch of a new premium channel on You Tube called Geek & Sundry aggregating popular web content from  personalities like Felicia Day (The Guild)  Wil Wheaton (Star Trek, The Guild), Veronica Belmont & Tom Merritt (Sword & Laser, TWIT), 

Speculation abounds that these moves signal Google's intention to improve their stagnated social networking destination, Google + and become a dominant provider of popular Web produced content much like Rose's Revision3 but on a grander scale. 

Google's recent acquisitions and development of You Tube channels may pose a threat to smaller content providers if successful.   Some pundits such as Leo Laporte have gone as far as to suggest  Google may aspire to the role of a content gatekeeper not unlike traditional television networks.  The dual role of Google as both content provider and de-facto search engine of record does beg the question of whether the company can remain unbiased in both roles.

Thursday, March 15, 2012

Economies of scale and the scourge of the middleman

You know me, I've got too much time on my hands these days so I chose to spend it keeping up with the tech pundits.  So I was watching Triangulation on TWIT this week (3-15-2012) and their guest was the co-founder of Matthew Flannery.

Kiva is a micro lending service that allows anyone to lend money to those in need around the world via a network of Microfinance Institutions (MFI's).  The first thing you have to understand is that it's not a bank and you don't get any interest on the money you lend.  In fact Kiva is the antithesis of a bank in that it exists not for its own profit motives but rather to offer access to needed  funding to those who'd be denied otherwise.  It's more like a personal loan that also scratches your humanitarian itch.

Make no mistake, these are loans not handouts.  In a move that should satisfy even the most staunch fiscal conservative, this is the ultimate expression of pulling one's self up by their bootstraps.  Most loans are for small businesses in need of a minimal amount of capital. Kiva facilitates the process by connecting would-be lenders to MFI's.  They take no  profit in the process and are funded by donations, grants, corporate sponsors and foundations.

Leo and Tom did a far better job  of shining a light on Kiva in their interview of Matthew Flannery on Triangulation than I can do here so I suggest you watch the episode if you want to know more. 
Kiva is the rare example of a middleman that contributes something tangible.  So it struck me how very wrong the so-called first world is in their handling of economies.

What it brought to mind was how much waste is caused by middlemen in the developed world.  For example, I have loans like everyone else.  A car loan, student loan, revolving credit card balances and the like.  Each one of those has an interest rate and somebody standing in the middle whose only purpose is to shuffle paper, for a fee.

I get the interest part of the equation, someone lets you use their money so it's only natural that they deserve some consideration for making it available to you. 

Here's the problem.

If you were to trace how many hands were on every dollar you ever borrowed or spent you'd soon understand why prices always seem to be going in the wrong direction of your bank balance.
Nobody just makes something and sells it for a small profit over their cost, there's always more to it than that.

 We always hear about "overhead"..  Overhead might as well be another name for middlemen.  Yes there's always a cost to make something but as business has evolved we've added layers of needless complexity creating a fertile environment for "facilitators". Everything you buy, use or see has an army of people between you and the producer.  All with waiting open palms contributing nothing to the process other than passing it from one hand to the next. 

Buy a new car and somewhere in the price you're going to pay the dealer's overhead.  He's got to pay for the land, inventory, utilities and property taxes just to offer that car to you.  Speaking of inventory he has to pay the car manufacturer for his inventory which introduces its own overhead.  The manufacturer has similar overhead for facilities as well as the overhead built into the price they pay their parts suppliers who in turn had their own overhead to produce the parts. 

The chain can go on forever with a middleman at every level standing between buyer and seller .  That cost ultimately  gets passed on to you in the form of a price that has little to do with the actual resources it took to produce the product.

Some might say that's just how the world works these days.  I say it's exactly why the world is in such dire financial straits.  There are far too many people whose living depends on doing little more than facilitating the movement of paper from one office to another. 

That's why there's so many layoffs in financial institutions.  When nobody's buying there's not enough paper to shuffle and the middlemen  start circling the wagons and reducing headcount.  Their fortunes are dependent on "servicing" accounts which in layman's terms means ensuring they get their fees for passing money from one entity to another.  They only thing they're actually concerned about servicing is their own profit margins.

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Whole economies are based on professions whose whole reason for existence is to "facilitate" a transaction.  Their names are common, Banks, Title companies, Loan Servicers, brokers, sales engineers and the like.  None of them produce anything tangible, they exist only as profiteers convinced of their own relevance.   Yet when they fail they jeopardize the financial stability of entire nations.

We hear a lot these days about poor working conditions in the third world.  That's because huge corporations seek to protect their profits by exploiting their workforces instead of cutting out the middlemen.  That includes the ones on their payroll by the way.

Of course PR departments and advertising firms swing into high gear whenever the public gets wind of an obvious injustice.  Realize that PR and advertising are just middlemen of a different color.  They too produce nothing of tangible value.  They are, in effect, the middlemen between customer and corporation and ultimately end up in the "overhead" reflected in the final price.

Which brings me back to  In developing nations a few hundred dollars can have the same effect as a few million in other parts of the world.  That's because the resources provided match the need and nothing more.  The process is kept simple and the middleman isn't driven by a profit motive in Kiva's case.  Economies grow by making transactions between the buyer and the seller simple.   The more complex a transaction becomes the more waste gets introduced into the process .  Middlemen for the most part don't follow Kiva's example and exist only to complicate simple processes to their own advantage. 

Until economies recognize the threat of the profiteering middleman they will never be stable.  As such a vicious cycle continues to erode an already weak currency platform that's backed by little more than faith in the very institutions that created the problem.  Not enough money in the treasury? Just print more and dilute its value even further instead of dealing with the real problem.

The question that's never asked is what role do the middlemen play in all this?  They're right in front of you but only visible in their deeds.  When the news cycle is full of reports on deepening national debt,  failing banks and financial market corruption you see their handiwork.    

Economies are driven by markets.  Markets provide products to consumers.  Money is not a product even if the Wall Street currency traders  and economic strategists think it is.  It's simply a facilitator, a mechanism for exchange between parties.   If we apply the same criteria to it as we do a profiteering middleman, the reason for all this economic strife becomes obvious.   We've assigned a value to the worthless.

Friday, March 9, 2012

IPAD Mania, Make it Stop!

I know, I shouldn't be annoyed by the hype.  I actually did a 2 part article predicting the hysteria but I can't help myself...

With Tim cook making ridiculous comparisons like how many more IPADS than PC's were sold in the same quarter I have to point out that the statistic is only valid if you also include things like  staples  and rolls of toilet paper.   Spoiler alert, way more rolls of TP flew off the shelves and it's a seriously more useful commodity.

Then we have respected technical pundits calling the new IPAD a "content creation device" and how we're now in the "post PC era" Here's a news flash, my 8 year old digital camera and my pen and legal pad are also content creation devices, that doesn't make them "resolutionary"  I also don't need an Internet connection for my PC to be useful and I don't have to worry about filling up my flash or blowing my Data cap because I downloaded too many movies.

I'm still mystified how people can enjoy a movie on anything smaller than a 30" screen.  I didn't even like it on a 22" LCD.  It's amazing how marketing can convince consumers that less is more with a few flashy applets and a pretty screen.

Ok, here's the thing.  The new IPAD is still a tablet.  Yes it's got the greatest 10" tablet screen in the world and can hook up to LTE (fake 4G) networks now.  Wonderful, and at only $600 to $800 I can join in the fun too.

I can't stand tech hype.  I can't stand the fact that a now obsolete predecessor to this current generation IPAD only drops $100 in price and I'm supposed to be thankful.

I love how tech shows geared toward mobile devices still rely on laptops for their content while they expouse the virtues of the IPAD's third coming.  If the day of the PC is over then toss the Macbook already!  No? Then accept the fact that a tablet, any tablet, is a complement not a replacement for a PC.
All those nifty apps on the IPAD?  They're toys, nothing more than recreational apps.  Do you think Tim Cook types up his speeches on an IPAD then sends it to his secretary to edit on an IPAD?  Do you think major Hollywood movies will be shot with an IPAD camera?  Not likely if they have a major studio behind them and want to display their work somewhere other than YouTube.

Yes, there's office for the IPAD but it's so stripped down that it might as well be a document viewer.  gotomypc on a tablet?  Yeah, that's what I need, to be scrolling around the screen because I can't see the whole desktop all the time hoping my swipe doesn't accidentally wipe out the RAID array because of a careless flick of the index finger.

If you have the kind of time to be playing games, taking pictures and watching movies on your tablet during the day then god bless you.  Most people I know get up, go to work and barely have time to get 1/2 hour for lunch let alone play with a tablet.  This kind of product is aimed at a shrinking market that can't really afford a $800 tablet that's going to sit on their shelf most of the time.

When you get right down to it the reality is that the promise of a device like this for the general public holds no more water than the middle aged man who buys the red corvette thinking he'll restore his  dwindling virility
...and Apple laughs at you all the way to the bank.

Wednesday, March 7, 2012

Apple revs up expectations for the latest IPAD.

Article first published as Apple Revs Up Expectations for the Latest iPad on Technorati.

I wrote an article last week in my Digital Dynamic Blog entitled, "It's Crazy".  I aimed it squarely at this week's IPAD launch and the media frenzy that accompanied it.  Seems I was right as we were treated to an avalanche of media attention and outlandish marketing sound bites.  Of course Apple's CEO Tim Cook wrung a bit more anticipation out of the crowd by first announcing the new 1080P Apple TV box before getting to the star of the show.   The new IPAD which is curiously just called, IPAD (not IPAD3 or IPAD HD) has the following specifications.

2048 x 1536 (3.1 million pixels) Retina display.
A5X processor, quad-core graphics

5 MP camera on the back
HD (1080p) video capture

Voice dictation (not SIRI by the way)
4G LTE capability For the IPAD LTE (73 mbps on LTE).

Wireless hotspot capability
10 hour battery life, 9 hours on 4G.

9.4mm thick, 1.4lbs.
Compatible  mobile carriers; Rogers, Telus and Bell in Canada, At&T and Verizon in the U.S.

Price Wi-Fi iPad: 16 GB ($499), 32 GB ($599), 64 GB ($699)
Price Wi-Fi + 4G: 16 GB ($629), 32 GB ($729), 64 GB ($829)

IPAD2 pricing will also drop by $100.
Availability: March 16th in the U.S. and Canada

During the event, Tim Cook boasted of more IPAD sales in the 4th quarter of 2011 than any makers PC sales.  That's a dubious statement considering most people don't use tablets the same way they use a pc especially when there's heavy lifting to be done.  While technically accurate, the statement holds no more distinction than asserting that more paperclips were sold in the same quarter than the total number of IPADS ever produced. 

The advent of the tablet is a welcome utility for many but just as your corner convenience store is not a threat to the supermarket the tablet is no threat to the pc.  Unfortunately, Ultrabook pc makers feel it is  leading at least one manufacturer, Acer to aim for a $499 price point.  This after admitting they currently make no profit at the current $799 price.   Considering a pc in any form factor will by its very nature will have more functionality than a tablet it seems a pointless goal.  More so when you consider that the top end of the IPAD food chain offers little more than a nice display and LTE connectivity at a $829 price point.  

Tablets have their place but limitations of storage, dependency on network connectivity for basic functionality and limited performance compared to even entry level PC's makes them more of a compliment than replacement for pc's.  That also calls into question the Apple price premium especially if you don't normally utilize their ecosystem.  Cooler heads suggest selecting devices based on your needs instead of marketing hype.