The Death of the Internet

I may be writing this epitaph a bit in advance, but mark my words it is coming. Somehow the Feds - those protectors of telecommunications and other forms of competition like the airlines - fell totally asleep at the switch. Actually, this is no big surprise, as they have fallen asleep at virtually everything they do. In this case, however, their lack of attention, or in this case their goal of giving everything to the Bells with no strings attached, is bound to fail miserably.

With the mergers of SBC, ATT and now Bell South, along with the merger of Verizon and MCI, the Internet backbone - those facilities that handle all of the Internet traffic in the US - is nearly totally owned by SBC and Verizon. Rather than act as protectors of the ability of all people in the US (and most of the people in the world) to freely access the Internet, the BIG BELLS are making noises like they need to charge a toll (and make money) on the Internet.

So, the one invention that nearly everyone agrees has been a huge boon to people and business alike is now going to have a toll. Isn't that great. This all stems from monopolists acting like monopolists. Now that the Bells have driven all of their competition out of business, they are taking aim at VoIP in order to preserve their monopoly local services. That's right, I used the word monopoly twice. What percentage of Americans have any choice whatsoever in who provides their local phone service. Maybe 10% or 15%. That meets any definition of a monopoly that I can think of. Didn't the Clinton Administration prosecute Microsoft as a monopoly because they controlled 85% of the desktops in America? Aren't the Europeans doing the same thing to Microsoft today? Who is in charge (or awake) at the FCC. There are much bigger things at stake here than all the attention this agency focused on Janet Jackson's wardrobe malfunction.

In order to preserve their enormous (and I mean enormous) profits here, the Bells want to charge a toll for any Internet traffic that is not theirs. If you are not willing to pay the toll, your traffic will be carried in "steerage class", and subject to the kind of quality the term "steerage" implies. The Bells should not be allowed to do this, as it will crush any future technology deployment on the Internet (like IP TV, video over the Internet, alternate telecommunications like Voip and Skype, and any other net invention you care to think of that does not come from the Bells themselves). This will remove all competition, and keep your local rates very high (one of the few services you buy that has INCREASED in cost over the last 10 years). I can assure you that at the end of the day these monopolists will not cannibalize their local services to bring you IP telephony at a discount. Nor will they innovate. They will apparently not allow anyone else to do so either.

How can you prevent the senseless death of the Internet? Write your Senators and Legislators urging them to support net neutrality - which is the concept of everyone has the right to access the net free from any encumbrances. Make net neutrality a law - which gives us the basic right not to be held up by these modern day robber barrons. What else can you do? Switch your local service from the phone companies to Vonage or the cable companies. The more revenues the BIG BELLS lose the less of a monopoly they have to protect.

This Peanut views the Internet as the greatest information tool ever invented. We can find out everything about anything whenever we want. I do not want to lose this ability to pad the pockets of these fat cat monopolists. Do you?

How to Kill a Small Business - All of them in fact.

As most of you know, I run a small telephone company here in East Texas. We have less than 20 full time employees, fitting anyone's definition of a small business. We provide health insurance for our employees along with dental and life insurance.

Well, I just received my renewal from United Healthcare, one of the largest insurance companies in this rapidly consolidating field. They proposed a 50% (no that is not a typo) increase in our health insurance premiums. 50%, who are they trying to kid. I have not seen one credible report indicating the cost of anything - outside of a barrel or oil - increased that much last year. Why didn't they just tell me they were no longer interested in my business? I would have been less aggravated over the matter.

After spending the last three weeks poring over the details of a number of other plans, I have come to the inescapable conclusion that the health insurers are intent on putting small employers out of business. I will pay almost $60,000 next year to provide decent health care coverage to my employees. This is a ridiculous amount, and an amount that will prove to unsustainable depending on the level of increases we are subject to in the coming years. Here is what health insurers, the health industry and the government better consider before it is too late.

If health insurance is too costly for small businesses, what happens? Do small business owners and their stake holder quit the business or do they cease providing health insurance to their employees? This may end up being the only choices we have. Will small businesses be able to attract "star" employees if they cannot provide benefits? How about just regular employees? What a shame it would be to lose the "engines of employment" in this economy due to the greed and oligopoly pricing policies of the medical industry.

If small businesses do not buy health insurance who will? Individuals? Get serious, very few people can afford the $1,000+ per month health insurance costs for a family of 4. Governments? This would be a bad deal for insurers, as Governments are big networks and have pricing power. Big businesses? Get serious again. Big businesses are off-shoring as many jobs as they can to avoid having to pay salaries and benefits. GM and Ford are in the process of cutting health benefits for their retirees as well as current employees. If they can do this with the backing of the unions, then every big company will follow suit. For another example of the issue, look at Wal-Mart's classification of employees, and how many are insured by the company. Wal-Mart, with all of the money and purchasing power they have, may be showing all businesses the way to reduce medical costs.

How will these uninsured persons pay for their medical costs? This is a much larger crisis than you would imagine. Higher costs of uninsured patients are passed on to patients who are insured, leading to higher insurance rates, leading to higher numbers of small businesses who cannot afford health insurance, and leading to more off-shoring by big businesses, leading to higher numbers of uninsured employees. Where can we get off this merry-go-round? The whole system will collapse in just a few more years of this.

At the end of the day, the health insurers and the medical industry is just screwing itself. In this peanut's opinion, it is only a matter of time until health insurance is unaffordable to most individuals and businesses. This will lead to a financial crises in the health care community (doctors and hospitals) due to the level of bad-debt they will have from patients not paying them, or from the discounts they will have to provide uninsured patients to get any payment at all. At the end of the day the government will have to step in and offer a solution. Not a band-aid, but a solution. This will be expensive. As a good Republican it pains me to no end to say that I almost wish the Clintons would have enacted a national health plan 15 years ago. The price tag would have been a pittance compared with what it will cost to fix this mess we have today.

When this happens, who needs insurers? Maybe the insurers will get what they deserve. Unfortunately, it will cost everyone but the insurers way too much money in the meantime.

I am no longer dreaming of a White Christmas

As some of you may know, I have relocated to Texas while the rest of the family remains in the frozen North. I generally fly back to Wisconsin every other week, and lately, I have had my fill of winter, thank you very much. As a result, I am no longer Dreaming of a White Christmas.

I am not entirely sure where this whole White Christmas thing came from anyway. Irving Berlin lived most of his life in New York City, and I can assure you White Christmases are reasonably rare having lived there for several years. I can also assure you that no one in their right mind wishes for much of a White Christmas in New York, as everything comes to a complete stand still and chaos ensues for several more days. I once was stranded in new Jersey for four days when they had a highly unusual 18" snowstorm. If anyone in the greater Dallas area wished for a White Christmas they would be committed, as I have never seen a snow plow in all the time I have been down here.

I think the whole White Christmas thing is pure you know what. Irving Berlin grew up in Siberia, and by the 1940s when he wrote White Christmas I can assure you he did not wish he had a Christmas just like the ones he used to know. I have it on very good authority he hated the holiday at any rate. The fact is most people in the US do not enjoy a White Christmas, and are probably not all that sentimental about snow.

As you can probably tell, I am a bit of a grinch, and have no use for the Holiday Nostalgia Rush. As such, I thought I would take a crack at a more sensible version or two of the holiday classic, based on my experiences.

Here's one for all those Florida residents: "I'm dreaming of a White Christmas stuck in traffic in the snow. Where the wheels keep spinning, the weather winning, and I can never seem to make it home."

How about one for Southern California: "I'm dreaming of a White Christmas sleeping on an ugly airport chair. Where the air is smelly, there is no food for my belly, and I might as well be in jail."

Or how about this one: I'm dreaming of a Warm Christmas not like the ones I used to know. Where I can be outside in shirtsleeves, the trees still have leaves, and you'll never hear me say its too cold."

Hey, I like that last one. I think I'll keep it. The majority of folks living in the US don't have a frigid White Christmas, and now I won't have to either. Even though there is no snow and the temperature is in the 50s, I can still enjoy a cold eggnog and a warm toddy too! Happy Holidays!

Now, just don't get me started on "Jingle Bells".

Bloggers are Bad - What??????

I just read an article in a recent Forbes Magazine which had very few good things to say about Blogging. Blogging ruins reputations, falsely accuses people and companies of things they may or may not have actually done, and says bad things about people and products. Sounds a lot like any "news" program on TV or editorial in a daily newspaper to me. To this Peanut Gallery member it sounds like I - and the rest of my ilk (ie: everyday normal people) - are not qualified to have an opinion or to express it. To this Peanut Gallery member, it sounds like you may be saying the First Amendment applies only to "certified" members of the press. While, since my understanding is that the First Amendment applies to me as well as you, I have a few views on this matter.

Here's one of the (wrong) points in the Forbes article: bloggers do not provide a fair and balanced view of issues. The fact is that the press, through their reporters and editorial staff, are able to spread their - founded or as it turns out in many cases not so well founded - opinions and rhetoric around under the guise of being part of "fair and balanced" reporting. Fair and balanced reporting my foot. I would like the press - from the New York Times to PBS - to show me one regularly scheduled show or a regularly printed newspaper that is "fair and balanced" to a normal non-partisan individual. The only problem with bloggers that I can see is that we do not have the cover of a magazine to hide behind when we spout our opinions.

Here's another problem the press has, they cannot control our opinions. What a shame, I am actually allowed to have my own opinion, and publish it, without owning a printing press. Isn't the Internet, the 21st century equivalent to the printing press, wonderful. I can have an opinion and the press cannot do a thing about it. I can tell other people my opinion, and they are powerless to prevent this as well. The biggest deal with blogs in this regard, is that I can reach anyone anywhere in the world - whether I know them or not - and the press REALLY hates that. Using the power of the Internet, blogs define the "free press", now don't they.

Here's yet another thing. I can have an opinion (and from reading this blog you know I do) on a product or service, without any undue influence provided by advertising. Now, if I had a big advertiser, I just couldn't up and run a negative article on them, could I. I would probably have to check with them to make sure a "cleansed" version of whatever I was about to say wouldn't offend them. It's like the car of the year award - which probably went to the manufacturer who spent the most advertising dollars - not the one with the most unique/beneficial/cost efficient vehicle.

Hey Forbes - and the rest of you self righteous so and sos in the press. Get over it. If I want to hear a bunch of (fair and balanced) diatribe from the left or right I can read any major daily newspaper or turn on any national "journalistic" program on TV. I don't want that. I don't want your hidden agendas or "special coverage". I don't want to be saturated with your view on anything from Scooter Libby to New Orleans just in case you don't think I am not "getting it" the first 50 times you tell me about it. I don't want to see just what you show me, or hear just what you want me to hear. I also don't want you preaching to me about how you have "ethical" standards and intimate that bloggers don't. What I do want to know is what people like me - just a normal little unimportant person in this world - have to say on a subject. That's why I like blogs and that's why I don't regularly read any newspapers. That's also why I elected not to get a TV for my apartment, and don't miss it at all.

I am sick of the press. And I am sick of them telling me what I should think. I am now sick of them complaining about every day ordinary people - like us in the Peanut Gallery - being able to have and express our opinions to anyone who wants to read them. The beauty of the wired world is that we are all equal. And we are all entitled to express our opinions - good or bad, and qualified or not, because the First Amendment says we can. And that, my friend Steve, is really what keeps you awake at night, now isn't it.

Here's What's Wrong with GM

There has been a lot of hand wringing lately about what is wrong at GM, and how to fix it. I don't know much about making cars, but I do know a bit about buying them. I also know a bit about running businesses, so here is one Peanut's advice to GM.

First of all, the executives running GM need to get real. By most business metrics, GM is a failure. It loses unbelievable amounts of money, its market share is in (and has been in) a downward spiral for years. Its bond rating is junk and its stock has been going nowhere but down in the last 5 years. Yet, for some reason, the five top execs at GM pay themselves $13.8 million per year. For what? They are managing a sinking ship. Why do they deserve so much pay? I wonder what the execs at Toyota pay themselves for running a successful company?

Next, the unions need to get real. According to UAW published figures, the average assembler makes about $53,000 per year and pays very little for health care costs. $53,000 per year? Now, for comparison, the average teacher salary is approximately $46,500 according to AFT figures. Teachers have a 4 year degree, which they invested in, teach your kids, and still earn less money than a person using a pneumatic screwdriver. That's just not reality.

Now lets look at GM's cars. With the notable exception of Cadillac, GM makes cars that are just plain ugly. Cadillac, at least, is trying to make a design statement. Remember the Pontiac Aztek. Who in the world designed that thing and then stood back and said "what a beautiful car"? Most of the GM cars look like they were design committee failures. Look at the average Honda and compare that to the average Chevy. The Honda has smooth flowing lines, while the average Chevy looks like one design team did the front, another the middle, and another the rear end.

Where is GM's technology? While Honda, Toyota and BMW offer cutting edge engine technology packing more power and better mileage, GM offers us the same tired and worn out engine technology year after year. Why? Because it's cheap. At one point in time GM lead the pack with hybrid technology. It frittered away that advantage and now seriously lags the market.

How about value. For $15k you can buy a Honda Civic which will comfortably seat 4 adults, offers zippy performance, and excellent fuel economy. In addition, most people expect the Honda will run forever with little besides ordinary maintenance. What can you get from GM for $15k, and what are your expectations for the trouble free nature of its operation? I have a Suburban. You can fill a 1" binder with all the repair receipts it took to get that truck running right and not breaking down in the first year I owned it.

Here's how this Peanut thinks GM can get it in gear. First, pay all of the execs $100k per year and then a bonus based on market share and profits. This should focus them in the right direction. If they don't like the pay package maybe they will all leave and some folks can be hired who are interested in making GM better. Secondly, get a labor contract that allows the company to close plants without having to pay for idle workers, and phase in pay that reflects prevailing market wages and health care benefits. Thirdly, get some new designers. Hire some folks from BWM and Honda who know how to make good looking cars that have excellent reliability.

Come on GM, get real. Maybe with some improvements more of us Peanuts would consider buying your products. Maybe they should hire some of us Peanuts to straighten out the joint ....

How to prepare for the worst

Here in Texas, and in my company in particular, we had to prepare for the imminent arrival of hurricane Rita. We were fortunate that the hurricane had pretty much run its course by the time it arrived here in my part of East Texas earlier today. Others were not so lucky, and I wish them well. Here's what us "peanuts" learned in preparing for the storm.

It is never to early to prepare. We run a small telephone company here in East Texas, so continuing to provide service during and immediately after the hurricane was very important. We began formulating plans early in the week assuming the worst would happen. We decided what supplies we would need, and who would be in charge of what portions of the preparation. By identifying all of the necessary tasks early on, and who needed to do them, we had the luxury of time preparing for Rita. Planning early meant that when we rented equipment and bought supplies, they were still available. Our early planning also allowed us a chance to continuously review our preparedness and make alternate arrangements as necessary.

If you fail to plan, plan to fail. Without a plan, it is difficult to prioritize needs and determine what contingencies to account for. We implemented a planning team on Monday and went through several disaster scenarios. This helped focus our team on the most critical components of our business, and the most likely problems we would encounter. It led us to buy things like high velocity cooling fans to protect our electronics, rent a second back-up generator, buy extra fuel cans, update contact lists for all of our employees, contractors and vendors, and so on. Without this plan I am sure we would have left some bases uncovered.

You always need fuel and water. Even though this part of Texas was scheduled to receive a glancing blow based on the late week forecasts, by Friday it was difficult to find bottled water, and gas stations were running out of fuel. What happened? The highways from Houston to Dallas were jammed, and miles and miles of traffic diverted via alternate routes through our town. Guess what everyone stopped to buy? We filled up all our vehicles and generators on Wednesday and avoided the rush, shortages and price hikes.

Follow up on the plan. One of the most interesting things we learned through this planning process was what we needed to do after the hurricane to make us better prepared for next time. We now have a follow-up plan to acquire additional equipment, make changes to our facilities and get higher on our suppliers and partners priority restoral lists. We will be in a better position for the next potential disaster.

Many times in life we are blindsided by one kind of a problem or another. In these situations, we do the best we can to get by. Sometimes, however, we are given ample warning of an impending potential disaster. In this case it is best to use all the time allotted to make sure you can survive.

A Victory for Medical Consumers in Wisconsin

The headline in Sunday's Milwaukee (Wisconsin) Journal read "Exposing hospital costs". It turns out a local suburban Milwaukee company HealthCare Direct LLC, has signed a deal with two large Milwaukee area medical providers who have agreed to provide 26 medical procedures at a guaranteed flat rate. The Journal published some of these negotiated flat rates. I'll bet you "peanuts" would like to know how your costs in Milwaukee (and probably everywhere else for that matter) stack up once the veil of secrecy is partially lifted.

The Journal compared the flat rate costs HealthCare was able to negotiate and the prices for the same procedures at several other Milwaukee area providers. Guess what, there was a difference of up to 112% in some of the costs - for exactly the same procedure. This result should not be a surprise in a system where prices and costs are allowed to be a mystery shrouded in an enigma. I wonder how long it will take for the prices charged by the other providers to gravitate towards the HealthCare negotiated prices. I'll bet it isn't long.

I think the Milwaukee example is a good start towards holding the medical industry accountable. It needs to go much farther, however. For one, outpatient procedure costs are not part of the disclosure. Neither are the costs local doctors charge for routine examinations and things like reading an xray. If we as consumers are expected to shoulder the burden of higher out of pocket medical costs, we need far more transparency from the medical community.

I think all of us can make our voices heard (and make a difference) in this debate by doing the following:

Become an educated consumer. Check out prices on state web sites. Always ask for an estimate up front for routine procedures. If the hospital cannot give you one, go somewhere else, and let them know you are doing so.

Become an activist. It's your money - if you do not protect it who will? Write your lawmakers. If they saw fit to protect you and I from the horrors of the muffler shop down the street, this issue certainly should merit their attention. Tell them to write legislation forcing medical providers to provide binding cost estimates, flat rates for common procedures, and force them into binding arbitration in cases of rate disputes.

Force insurers to disclose the discounts they receive from network providers. How am I supposed to figure out which $300 per month premium is the better deal when I have no idea what kind of discount the insurer negotiated with the health care network. In business we use non disclosure agreements to protect us when we disclose sensitive contract information like rates. Rather than tell us the prices and discounts are a secret, have us sign non disclosures and let us make an informed decision.

There is lots to be done to ensure we get a fair deal from the medical community. This community has lots to lose if they have to come clean on pricing and costs. You and I have lots to gain. How you respond may be the difference between the medical community winning and us consumers winning. I would rather see us win, how about you?