This conference, sponsored by the Congressional Internet Caucus Advisory Committee, has become the "go-to" event for Internet policy makers and observers. To meet the needs of our readers, we are restricting coverage to a single session dealing with Cloud Computing. In particular, we focus on legal and privacy issues associated with "The Movement of Information from the Crowd to the Cloud."

While Cloud Computing has recently gotten a lot of publicity from big name players like IBM, ATT, Amazon and Google, little attention has been devoted to security and privacy concerns, especially protection of client data and meta-data (information about the data) from unauthorized entities. This panel zero’d in on exactly that topic. The three panel participants were:

• David Schellhase, Senior VP/General Counsel, salesforce.com Inc
• James X. Dempsey, Vice President for Public Policy, Center for Democracy and Technology
• Matthew Parrella, Assistant District Attorney, U.S. Department of Justice

Background

There is a lot of confusion as to what Cloud Computing really is. One panelist thought that the Wikipedia definition was a bit too all encompasing. But he quoted the first three paragraphs anyway:

"Cloud computing means Internet (’Cloud’) based development and use of computer technology (’Computing’). It is a style of computing where IT-related capabilities are provided "as a service"[1], allowing users to access technology-enabled services "in the cloud"[2] without knowledge of, expertise with, or control over the technology infrastructure that supports them[3]. It is a general concept that incorporates software as a service, Web 2.0 and other recent, well-known technology trends, where the common theme is reliance on the Internet for satisfying the computing needs of the users. For example, Google Apps provides common business applications online that are accessed from a web browser, while the software and data is stored on the servers.

Cloud computing is often confused with grid computing (a form of distributed computing whereby a "super and virtual computer" is composed of a cluster of networked, loosely-coupled computers, acting in concert to perform very large tasks), utility computing (the packaging of computing resources, such as computation and storage, as a metered service similar to a traditional public utility such as electricity) and autonomic computing (computer systems capable of self-management)[4]. Indeed many cloud computing deployments are today powered by grids, have autonomic characteristics and are billed like utilities, but cloud computing is rather a natural next step from the grid-utility model[5]. Some successful cloud architectures have little or no centralised infrastructure or billing systems whatsoever including Peer to peer networks like BitTorrent and Skype and Volunteer computing like SETI.

The majority of cloud computing infrastructure currently consists of reliable services delivered through next-generation data centers that are built on compute and storage virtualization technologies. The services are accessible anywhere in the world, with The Cloud appearing as a single point of access for all the computing needs of consumers. Commercial offerings need to meet the quality of service requirements of customers and typically offer service level agreements[6]. Open standards and open source software are also critical to the growth of cloud computing[7]."

http://en.wikipedia.org/wiki/Cloud_computing

IBM refers to cloud computing as an emerging approach to shared computing infrastructure. Results are computed in a data center (seen as "being in the cloud" by users) and returned over one or more Internet connections. Users are not generally aware of the underlying technologies or rules governing the flow of data within the cloud. Others believe that cloud computing is a broader concept- any 3rd party computing or storage service, with the Internet as the backbone. All panelists agreed that cloud computing employs a shared services model.

Cloud computing was seen as being an integral part of the inexorable redirection of technology from local use to the net. Storage and services occur in the network, rather then at desktops or laptop PCs. Cloud computing dramatically lowers the cost of storage to the user (by taking advantage of cheap and voluminous network storage).

We were surprised to hear that Dell has applied for a trademark on the term Cloud Computing.

http://www.dell.com/content/topics/global.aspx/sitelets/solutions/cluster_grid/cloud_optimization?c=us&cs=OWR08&l=en&s=bsd

Key User Concerns with Cloud Computing

One panelist suggested there were three drawbacks to cloud computing (with my questions in paranthesis):

1. Users pay a fee (isn’t it normal to charge for a service?)

2. Users lose control over services (isn’t this always the case with outsourcing?)

3. Loss of privacy of data and meta-data (isn’t a privacy statement and contract necessary?)

Many questions arise regarding regulation, security and privacy:

• Should this new industry be regulated? If so, in what way?
• Who (besides the client company) should have access to the data/ meta-data/ results of computations?
• When and under what circumstances should notice be given to the client that law enforcement (or any government agency) seeks or is given access to the data? In particular, can the U.S. Patriot Act be invoked to commandeer data from a company suspected of aiding and abetting a terrorist organization?
• What privacy protection will be offered cloud computing client companies? How will the integrity of their data be preserved? Can it be adequately covered in a contract or service level agreement?

One panelist stated that privacy protection falls off when data is stored in the network. If it is exposed to public view, the data will not be protected at all. What about data in transit- is it protected? User concerns here include terrorism, identity threats and on-line fraud/ scams. A big concern of one audience member was that Cloud Computing service providers would hand over customer stored data/ usage patterns to govt agencies who had not obtained proper authority. Justified under "Patriot Act" but compromising privacy and integrity of data.

According to the DA panelist, "there is a crazy quilt of laws governing privacy of network stored data and that has become a major issue effecting individual (and company) rights." He stated there was a movement away from hacking and copyright infringement and into industrial espionage- the theft of trade secrets. The concern was that cloud computing service providers might not have robust security practices in place to prevent that. In other words, they might not be able to honor the customer contract that protects Intellectual Property/ trade secrets from others. (See last paragraph for a different opinion).

A crucial concern is who can have access to (proprietary) company data stored in the network? Not just third parties (including government agencies and police forces), but any and all Data Base and System Administrators who hold "the keys to the kingdom." Those insiders could pose a threat if they are recruited by an entity practicing industrial espionage (including foreign governments). But that seems to be an internal security matter, under the jurisdiction of the client company, rather then the cloud computing service provider. Key question is what procedures does the provider have in place for authentication, authorization, and administration of user requests? Are these being standardized?

One panelist took an optimistic view, stating that the cloud computing service provider would do a better job of security then the client company. Since it was responsible for security management and privacy protection of many client companies, the provider must have a very robust and comprehensive security system in place to be a viable entity. If it didn’t, it would go out of business very quickly, independent of its price or performance. Hence, the provider would be able to adequately protect client IP as per the service contract, according to this panelist.

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Addendum: IBM invests Nearly $400 Million on Cloud Computing Centers in U.S. and Japan

"We consider cloud computing to be the model that can fundamentally change the current IT market structure and create paradigm shifts," said Yutaka Miyabe, director of system research and development center, NS Solutions Corporation.

http://www-03.ibm.com/press/us/en/pressrelease/24788.wss

"Cloud computing is fundamentally about re-engineering the world’s computing infrastructure, to enable game-changing — even life-changing — applications. To IBM, cloud computing is much more than the normal evolution of a data center," said Willy Chiu, Vice President, IBM High Performance On Demand Solutions.

I haven’t had a chance to review the service first hand yet, but  the documentation suggests the MobileTalk application automatically redirects international calls to the Packet8 VoIP network. Packet8’s international calling rates are much lower than those of AT&T. Of course, the caller still has to pay the minimum $69.99 per month for the privilege of using the iPhone.

Brad Smith of Wireless Week said it best in his July by-lined article, "It won’t happen.  The harmonization of WiMAX and LTE, that is."  

Please see: http://www.wirelessweek.com/Article-Marriage-WiMAX-LTE.aspx 

                        
Sprint, which was one of the founding members of the NGMN in 2006, has recently quit that Alliance after it selected LTE as the 4G technology to pursue for mobile broadband.  Both AT&T and VZW have also focused on LTE, as have all of the large European wireless carriers.  On the other hand, neither Sprint or Intel have announced any plans for LTE and will continue their quest of the WiMAX holy grail.

Analysis: 

The major wireless network operators are determined to ensure that emerging wireless/ mobile technologies are optimized to meet their commercial needs. The most powerful body coordinating the network operators’ activities is the NGMN (Next Generation Mobile Networks) Alliance, which numbers 18 carrier members and works with a wide range of other standards bodies and alliances. When it was first formed, it seemed to be a force for unity across the industry, prepared to support more than one access network technology, and bring various 4G contenders within a common umbrella of patents policies, performance tests and interoperability systems.  But now the operators are descending into the same skirmishes that have often delayed or fragmented standards over which the vendors have ruled.  The clearest proof of that is that the NGMN Alliance has selected just one technology - LTE - for its preferred next generation mobile broadband network.  That decision prompted one of WiMAX’ greatest supporters- Sprint Nextel - to quit the Alliance. Sprint was one of the founding members of the NGMN in 2006.  Now, Sprint looks increasingly isolated amongst the network operator community as it has quit the NGMN Alliance while the other operators remain. 

Sprint is under further pressure.  AT&T has filed a petition with the FCC to block the formation of the "New Clearwire" because of uncertainty of how that company’s spectrum will be used.

http://www.wimax360.com/profiles/blog/show?id=610217%3ABlogPost%3A84542

Meanwhile, the IEEE 802.16 standards committee completed its work on (licensed) Mobile WiMAX two years again and has no projects to evolve to LTE.   The 802.16 Task Group m (TGm): Advanced Air Interface is further developing the P802.16m project to amend the IEEE 802.16 WirelessMAN-OFDMA specification so that, while offering continuing support for legacy WirelessMAN-OFDMA equipment, it can meet the emerging cellular layer requirements of IMT-Advanced next generation mobile networks.  But that work is quite generic and not specifically  related to LTE.  Meanwhile, the WiMAX Forum has been certifying equipment and WiMAX compliant networks have been rolling out this year.  Backward compatibility will not be possible if WiMAX and LTE were to come together.

These diverging developments dampen hopes for a near term convergence of WiMAX and LTE into a single mobile broadband standard leading up to 4G.  After selecting LTE earlier this month, the NGMN Alliance stated that  it would assess WiMAX again in its next iteration, IEEE 802.16m.  This strongly implies that WiMAX and LTE will remain separate for the current generation.  However, they might converge in a few years at the 802.16m/LTE 2 stage, assuming that both technologies have strong market positions at that time. But few believe that Mobile WiMAX and LTE will be harmonized any time soon.

For more information, please see the following articles:

http://www.fiercebroadbandwireless.com/story/sprint-ends-membership-ngmn-alliance-after-group-backs-lte/2008-07-17
http://www.telegeography.com/cu/article.php?article_id=24113&email=html

http://www.wirelessweek.com/Article-Marriage-WiMAX-LTE.aspx

http://3g4g.blogspot.com/2008/07/lte-and-wimax-harmonization.html

Here’s a brief tutorial on NMNM technology:      http://www.ngmn.org/index.php?id=31

Opinion:  We continue to believe that mobile WiMAX will be deployed for fixed broadband wireless access in developing countries which have little or no wireline infrastructure.  Here is one firm’s corroborating opinion about Latin America:

"Challengers in Latin America are choosing WiMAX as their access solution because it allows them to offer convergent solutions and a faster time to market. These companies can easily adopt WiMAX because, unlike incumbent operators, they are more adaptable to opportunities and restrictions inherent in the technology and the market. Pyramid Research believes that due to their flexibility, other CLECs will choose WiMAX as their access technology and, in the next five years, WiMAX will be the fastest growing wireless technology, reaching nearly 6m subscribers in the region by 2012."*

*Excerpt from Pyramid’s Network Solutions & Strategies Perspective: "CLECs Choosing WiMAX to Challenge Incumbents in Latin America"; July 25, 2008.
 

Indeed, there was consensus among the panelists that at the moment, the telecom industry is not making necessary investment in plant and equipment  despite business opportunities for companies that can exploit the new Exaflood demand for goods and services. 

http://www.itpro.co.uk/604527/study-predicts-serious-bandwidth-shortages

Global bandwidth to double in two years: 

Global bandwidth demand will double in the next two years and usage could be 40 to 100 times what it is currently by 2018, according to a study.   The study, commissioned by CIP technologies, says demand will be over 160 terabits per second in 2010, which is more than the total demand from 1998 to 2008.  

Demand has risen due to the popularity of video sharing sites like YouTube, which some have claimed used as much bandwidth in 2007 as the entire internet in 2000.   ‘Networks are now being used in a way that few people foresaw, for example early take-up of personalised video, rather than broadcast television, dominating internet video services,’ said the study’s author, David Payne of the Institute of Advanced Telecommunications at Swansea University.

http://www.bcs.org/server.php?show=conWebDoc.20186

Opinion: Not enough fibre

According to experts the world will soon run out of Internet bandwidth unless we install oodles more fibre optic cable. This shortage was discovered by a company which makes…..fibre optic cables.

 http://www.crn.com.au/News/80396,opinion-not-enough-fibre.aspx

 Contrary view point article:  Don’t Fear The Bandwidth Apocalypse

A good rule of thumb: when someone claims the Internet is facing bandwidth armageddon, it’s usually because they’re in the business of designing and selling traffic shaping hardware, trying to justify new and frequently unjustifiable broadband pricing models, or trying to scare politicians into doing what they want. The guys actually working in the network operation centers will generally tell you that congestion can almost always be handled with smart design and capacity upgrades.

The key takeaway is that broadband households are drivers of consumer electronics spending. US Broadband households, which represent 54% of the population, purchased 66 to 72% of all consumer electronics. 50% of the broadband households bought a PC in 2007. Another related driver is that households with kids spend more per year on consumer electronics ( $2,124 versus $1,734) as compared to households without kids.   

Connecting the various devices that people are purchasing was the subject of a panel led by Rob Gelphman of the Multimedia over Coax Alliance [a Viodi View sponsor]. The home network, at least of the wireless version, is still not plug-and-play, as evidenced by the high return rates of between 18 to 20%. Less than 1% of these returns are for defective units, while most of the returns is incompatibility or difficulties with installation, according to Daniel Wong of D-Link.  Self-install of networking devices are still a challenge for the average consumer as evidenced by the high return rates for these devices. 

RyanTykwinski of Best Buy stated that the feedback from customers is that WiFi quality of service isn’t good enough. Further, 802.11g wasn’t a big improvement over 802.11a/b, so there is hesitancy among consumers to move to 802.11n. New customers don’t have a compelling reason to expand their wireless network. Notebook computers have been a driver for wireless, but Tywinski suggested that this segment is saturated and that new potential customers of wireless don’t have a compelling reason to upgrade. 

At the same time, Daniel Wong of D-Link suggested that Powerline or MoCA solutions still haven’t come down enough in price at the consumer level to create a demand similar to wireless.  Wong also mentioned that return rates for WiFi routers are between 18 to 20%, while less than 1% of these returns are for defective units.  The problems tend to be with installation and incompatibility between devices. 

Actiontec has taken an approach of working with Communication Service Providers, such as Verizon, Qwest and TDS, to promulgate MoCA technology inside their residential gateways. They clearly see the value-add in working closely with these operators to introduce technology to consumers, so as to reduce customer troubles. 

Along these lines, one of the more interesting demonstrations at the show was a demonstration of a Smart Home concept using 4Home software integrated into one of their routers. From a PC or mobile web browser, it was possible to control lights, set alarms and remotely video monitor through multiple cameras, a real live home. The thing that was impressive about this home is that it is a 60 year old home, lived in by real people (more on this in a future issue).   From a telco perspective, the smart home router could provide a relatively inexpensive way to upgrade a household from broadband to a smart broadband home. 

Poll suggested that Qwest is betting on the Internet for delivery of video, although he indicated that Qwest has a great relationship with DirecTV for video. He pointed out that young people are less interested in linear television and want on-demand content. Qwest has focused on Metro Ethernet and ensuring Quality of Service, so that they can do a better job of delivering over-the-top video. Similarly, Wegleitner acknowledged the challenge of the backbone and mentioned what they are doing with the Distributed Computing Industry Association (DCIA) to use peer to peer technology to make for more efficient network. 

All three speakers stressed the importance of being able to manage bandwidth and devices in the home. The home network was termed, “the final frontier,” by Chris Rice. According to Wegleitner, Verizon has 3.7 million CPE under management today. Poll said that TR 69 is a start as far as remote management. Poll suggested that the future is the interaction of smart home networking with a smart network. According to Poll, telcos need to take advantage of their position as trusted entity, if they are going to be successful in the home network. 

Rice pointed out that home networking also has potential for reducing energy consumption by enabling new efficiency through remote control of appliances, etc. AT&T is pushing for Uverse to be the first energy-star rated communications service, while Verizon has a goal of 20% improvement in energy efficiency in their equipment. Along these lines, Poll indicated that thin-client, “cloud computing” uses less energy than a traditional PC on every desk. 

In the end, these three technologists had more in common than not in terms of what the challenges and opportunities are. Interestingly, the networks they are deploying to meet those opportunities continue to grow further apart. 

"………The camera shot includes a full view of her buttocks and her upper legs as she leans across the sink to hang up her robe……….."

In years past, I would have been in the dark. Thanks to the power of Internet video, however, I was able to find a copy of the video within 30 seconds and view for myself what the FCC considered obscene.  The image below is a screen capture of one of the tamer shots.    

You can see the video by clicking on this link (assuming that ABC doesn’t make YouTube remove it).      

The point is, what was obscene on broadcast television does not violate FCC rules on broadband television; at least yet. This skirting of broadcast television rules could be the biggest impact that broadband TV has on the future of television, as this provides a new medium for the broadcast networks to create derivative products (e.g. an even coarser version of the “Family Guy”). Things like limits on advertising to children, hard liquor advertisements, the fairness doctrine, nudity and swearing are beyond the FCC’s current scope for regulating video over the Internet. 

Another piece of evidence that the television business model and rules are changing is Hulu’s deal with PBS to put advertisements in front of its programming [thanks Viodi View reader, Peggy for pointing this out).   This would have been a huge deal 20 years ago, when PBS was available only in a broadcast medium.

Where it will get interesting is when politicians start hearing complaints from constituents about “FCC rule violations.” Of course, the FCC won’t have rules (although they will probably try to figure out how to expand their powers) and Congress will get involved and it will get real political. Knowing how long it generally takes the Federal Government to act, this sort of political uproar may still be a long ways out (it took 5 years for the FCC to rule on the aforementioned NYPD obscenity case). 

Just as I was about to publish this article I saw today’s issue of the OPASTCO 411, which summarized the Markey Bill ( H.R. 6320).  This Bill is an indication that the future may be closer than I thought.  H.R. 6320 calls for captioning and providing emergency alert info for video over the net, as well as adding requirements for other IP devices. Clearly, this is a grab to regulate the Internet and it probably will not be successful in this election year, but it is start of what could be a very long and interesting fight.    

To avoid future legislation, the Broadband TV industry should adhere to current broadcast rules as much as possible and, as needed, set new guidelines.   This may require the various industry players to reach across ecosystems and proactively work together. 

• Communications (tracking people and places)
• Commerce
• Marketing and couponing

Larry Goldstein, a patent lawyer who wrote a book on patent pools, said the WiMax group could reduce the number of licensing deals to be negotiated even if some patent holders don’t join. "It can cut down on the onerous negotiations and cut down on the overall royalty rate," he said.

http://online.wsj.com/article/SB121297783001956285.html

In a webcast on June 9th the OPA members made it clear that companies that join the group don’t relinquish their patents. The IPR remains with the owners and they are free to use them. Instead the group will work to make it easier for others to license those patents.

In addition, the OPA referred to itself as a "patent pool" and said that it is very different from the WiMAX Forum, an organization with a goal of promoting interoperability and collaboration among its members.