This Week In Tech 441 (Transcript)
Leo Laporte: It's time for TWiT, This Week in Tech! The French connection this week, Patrick Beja and Myriam Joire join us to talk about President Obama's speech on the NSA, what did he say? We'll also talk about the big court decision about the FCC, is it the end of net neutrality? And Google buying Nest, what do they really want? It's all ahead, next on TWiT.
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Leo: This is TWiT, This Week in Tech, episode 441. Recorded January 19, 2014
French for Entrepreneur.
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Myriam Joire: Have we lost them?
Leo: No, I'm talking to you!
Myriam: Me? Oh! No, I'm not Canadian, I mean I'm a Canadian, I'm not French Canadian-
Leo: But you're French French
Myriam: Yes, French French, from south of France.
Leo: Oh, south France?!
Myriam: Yeah, from like Nice, Cagnes. And then the Candaian part comes in, with the English speaking, like Toronto the Vancouver area, I spent a lot of time in those cities.
Patrick Beja: You don't say, "a-boot?"
Myriam: Not as much anymore, I still have a bit of a French accent, and a bit of a German accent because my mom is German, and then I possibly have a bit of Canadian, but I've lived in the US for like 12 years now. So I think the California English took over.
Leo: No, you sound French. You have a beautiful French accent, very sexy, I love it.
Myriam: You can speak with a French accent if you want to. If it's more sexy for you, sure!
Leo: From Paris, France Patrick Beja, “notPatrick” on the Twitter. And a multilingual podcaster and a regular, also, on the network. Thank you, both of you, for being here this week it's nice to have you both. Did either of you watch the President's address on Friday? I'm just curious, I wonder if there's-
Myriam: I did not watch it, but I read about it.
Leo: Yeah. Patrick, did you?
Patrick: I heard about it, but I watched our own President's address, who had to side-step questions about his affairs, and scooters and stuff like that.
Leo: So in France they're talking about his love life and then in the US they're talking about our spy life, but that combine beautifully because we were spying on his love life. President Obama took to the podium to talk about, of course, the NSA spying and did in fact say, you know what? We want to strike a balance between surveillance policies and civil liberties. The NSA has admitted to, I guess at this point, has accepted, has been collecting all the phone data of every phone call going on in the United States, illegally! All of the things, so he addressed that, saying, not that the program would end, but this actually worries me, the information that the NSA collects will no longer be held by the NSA, that they will have to go through the Federal FISA court to get access to the material. So, in other words they'd have to go to a judge and say, this is what we want and this is why we want it. I don't know, do they propose-?
Patrick: They did not propose anything, they just said they're not going to be holding the data anymore.
Leo: Who are they going to give it to, Target?! I don't understand why this is better.
Patrick: Well we don't know, we can only speculate. It's either the Telecom companies are going to hold them or a third party.
Myriam: Oh yeah, good luck with that!
Patrick: That's my first rant of the show, there may be another one. But the thing that's really mind-boggling, there are two things. First, he talked about phone metadata, which is important, for sure.
Leo: That's what they're collecting, who's calling whom, dropped calls, missed calls, wrong numbers. Apparently, they're collecting texts and things like that as well. But mostly they're focusing, not on content, but on transactions. And they're saying, it's just metadata, don't worry about it! But everybody who's in our business knows that data is extraordinarily valuable, and can in fact, tell them all sorts of stuff that invades our privacy.
Myriam: Of course.
Patrick: Yeah, but you know, he addressed this, he also said that there would be better representation of a public interest on the FISA court, which is important, but only in new cases when questions of new technology arise. When there's something new they haven't ruled on before, there would be some public interest representation, but that's good as well it just isn't as good as having public representation, period. And he also re-juiced the number of hops for that metadata that validates your connection. So you can only now connect metadata on someone two connections away from the person you suspect is doing illegal activity, and before it was three hops, so that’s a little bit better. But what was not addressed at all, that really blew up, was the question of prism, and the NSA collecting data from the internet! That was not even mentioned, from what I understand.
Leo: No, and this is the stuff they were getting from the TelCo's, the TelCo's say, we don't want to have to hold on to this. The president says that the Attorney General and the Direction of National Intelligence will have to come up with a plan by March 28th. Do remember, that the law that authorizes this bulk collection, it is legal, expires next year. And pretty much everyone agrees that, after the revelations of Edward Snowden, it's not going to get renewed. But there's the other side of this, which is, no one wants to be the person who, it's interesting to watch the members of congress talking about this on television this morning, no one wants to be the one who says let's stop collecting this, and then there's a terrorist attack, then they're on the hook for this. That's why this is so difficult.
Myriam: I don't know, it seems to me like, basically I don't think Obama really said anything, actually.
Leo: He's quite adept, I think, to doing that.
Myriam: You know damn well that the NSA can do whatever they want. Like, we have no proof whatsoever, that they're not going to continue to hold on to this data, and do anything. So, I have a hard time believing any of this. I think it's just a political move saying, we acknowledge that there is something going on that is bothering you, the people, and we're going to look into it and do something about it. But I really don't think it's going to happen.
Leo: And furthermore, it is also now clear that much of this information is shared, for instance, with the British GCHQ, and they have no restrictions on the way they can use it.
Leo: And the reason this is a tech story, besides the fact that it's about stuff happening on the internet, is that American technology companies are really devastated by this because no one wants to buy American gear anymore, because the presumption is that it's just giving the spies beach head in your business. So, it's really a disaster in Silicon Valley, among all the other implications. This is a big story for technology, I think.
Patrick: Go ahead Myriam.
Myriam: No, I was just going to say I think if there's any good to come out of this is that the very strong Silicon Valley companies are going to get together and maybe kind of lobby, they have been kind of anti-lobby. I mean, I hate lobbies, I just think the whole thing is screwed up. But that just seems to be the way the government operates in the US and so, perhaps maybe they can lobby in another way. And this ties into the other big thing that's been going on, which I think is a very big deal, is the net neutrality stuff.
Leo: Yes, we will get to that too, believe me. There's a lot to talk about.
Patrick: That will probably be my second rant.
Leo: I had a feeling that's what you were going to talk about!
Patrick: But you know, I'm not as cynical as you Myriam, I think that the things that Obama did address were kind of addressed in the proper direction. Certainly, he wasn't going to let up on everything. What worries me is what he didn't talk about at all. If you say the NSA is going to be doing whatever they want anyway, then there's no point legislating anyways. So, I understand the feeling, but I think it might be a little extreme. That being said, supporting your view, is that story congressional reps had to ask Bruce Schneier what he is doing, because the NSA won't tell them.
Leo: So Bruce Schneier, who's the greatest security blogger of them all, he's been on the show everybody loves Bruce, Congress says, could you tell us? Because the NSA won't tell us. That's where the failure is, I recognize that in order to be secure, we need to do something. I mean, after 9/11, there was absolutely a mandate from the American people, as well as the government, for these spy agencies to get going and protect us from future attacks, and I understand the need for that. Of course, the acknowledgment was we can't tell the American people what we're doing, but by law, we need to inform Congress, and they need to, on behalf of the American people, have oversight of what we're doing. That's where it's really fallen apart, there is no over-sight and there has to be a way to balance safety- Now, I admit that this is a very American point of view, and is one of the reasons I like having you guys on the show, is we want to protect ourselves against terrorist attacks. But ask Chancellor Merkel of Germany how she feels about it, because in that process, we are listening in on her cell phone calls.
Patrick: That was interesting. One of the other things that he said was, "We're going to stop listening to foreign leaders."
Leo: About time!
Patrick: Alright?! But he also said that non US persons would be afforded the same rights as US persons, which apparently, they're spying on Americans anyways so I'm not sure what that does.
Leo: You get the same right to be spied on, congratulations!
Patrick: Exactly, but I wonder if- I'm going to try to get out of my comfort zone for a second, is there a chance that all of this spying is actually getting them results and they have stopped attacks, and they actually can't communicate on that? And Obama did say that success goes unmentioned and failure can be catastrophic, and the success that goes unmentioned is kind of important there, and it's obvious but maybe, they actually see the results of these actions and just can't talk about it. Maybe in fifty years we are going to have declassified documents that are going to show that three attacks were stopped in the last ten years, and Obama is seeing those things but just has to take it. Take the public opinion of him being very against him and saying we have to do it, that's the way it is.
Leo: In his press conference, did the Prime Minister of France talk at all, about this and about the US spying on France and what his reaction is?
Patrick: Honestly, I cannot remember. I'm not sure-
Leo: I'm sure he's busy with his own scandal.
Patrick: He's busy with his approval rating, which is the lowest that anyone has ever had in the country. It was in the teens, but now is a little bit above, but he is trying to get the economy back up. Yeah, it did make a little bit of a stink, but has sort of been forgotten now. Especially since the government had to pass a set of laws, which were controversial in their own rights in France, and were kind of in the same vein as what we've seen in the US. So, I don't think he wants to bring too much attention to that again.
Leo: Well, he must be gratified by the fact that we've decided not to spy on him anymore.
Patrick: So, there's one last thing I wanted to mention on this topic and it's sort of the contradiction of them, and then it's the forever 'them', 'they' and basically it's the government and the NSA saying that what Snowden did was wrong, and we are not doing anything wrong. Now obviously Obama had to announce some pretty- A number of changes because of these revelations. So I'm wondering how they can hold that dichotomy in their arguments of, if he actually did reveal secrets, that if what he revealed wasn't really wrong then why they are now changing it, to much acclaim? That's something that I haven't seen addressed anywhere.
Leo: Right? Went from Snowden is a traitor, we don't want to talk about this, we did nothing wrong to okay we should talk about this, yes we did something wrong, but Snowden, he's still a traitor!
Myriam: My biggest problem, my whole approach on this is, perhaps if we didn't go out there, fight wars and piss people off, they wouldn't try to terrorize us and then we wouldn't have to do all of this!
Leo: That's a much larger conversation, about why terrorism happens.
Myriam: My point is right now the NSA is doing stuff against US citizens, Canadians and French people like me and Patrick and people all over the world, that are just completely insane. I don't know if you're familiar with the big hacker conference that takes place between-
Leo: RSA is coming!
Myriam: Every year in Germany, and this year was in Hamburg, and I watched Jacob Applebaum's talk for an hour and he is very technical, but it outlines some of the crazy ass malware and other virus-like activity that the NSA is putting into people's computers, sometimes at the hardware level. To me that is just unacceptable and just goes beyond, as you said earlier, it threatens our economy and I still believe in competition, I still believe in people making money and I think that this is a much bigger issue. I think that some results should be had.
Leo: Applebaum was talking at the KS computer conference about all of these NSA ant-spying things, then der spiegel did the full article and we've talked about that, 50 page catalog of things that you can buy from the NSA.
Myriam: That's insane.
Leo: You know what, those don't bother me as much Myriam, because those are targeted. We want to find out what these bad guys are up to, so we have a technology that admittedly-
Leo: How do you know they're not using that against people that- How do you know you're not targeted?
Patrick: Of course, but you never know. Since James Bond has been using microphone pens, you've never known if he was or wasn't using those things to spy on people he shouldn't have been spying on.
Leo: There's two different arguments on this Myriam, one is that we shouldn't be doing this at all, and I think that is an extreme that a lot of Americans wouldn't support. They want to be protected a little bit, so they don't want to take away all of law enforcements tools. In fact, we're happy that law enforcement has some tools so if there is an Al Queida operative in the US, we can capture him. Then on the other hand, the NSA has gone far beyond that to collect data about every single American citizen, well beyond what their charter allows them to do. And I don't think there's any argument that's going too far. You know, you can argue Myriam we've created terrorist states, and at this point, we've got some bad actors out there that aren't going away.
Myriam: Sure. I agree with you, but what I'm saying is, I'm concerned that the NSA is actually actively withholding bugs in commercial code, back-door's that,
Leo: We know that! The conference, the RSA conference that you were talking about- A lot of people have said they aren't going to the RSA conference because it was revealed that the NSA paid the RSA $10 million to put subverted encryption code out and recommend it. It's a code that gives a back-door to the NSA, so you're absolutely right.
Myriam: You know, to me it’s a technology problem. It’s not just a political problem. Technology’s being screwed with, basically. By that, Silicon Valley, the entrepreneurship and the capitalism that happens around technology is being screwed with by this, majorly, I think.
Leo: And that’s the blowback. And of course you ask Google, Microsoft, Apple, Facebook, all these companies that, CISCO, a lot of the targets of these ANT protocols were CISCO routers. There’s blowback. It really, really hurts us. But I don’t think the answer is completely obvious, or do you?
Patrick: No, I don’t.
Leo: I think it’s difficult.
Patrick: But the one thing I will say, is that on the topic of Americans going to war and pissing people off, my country having been the recipient of the Americans’ help, I will probably abstain from commenting on that.
Myriam: Yeah we’re all pretty guilty on the western world, pretty much, right now, right?
Leo: Yeah. It’s so hard. I don’t really know what the answer is. Let’s talk about the rules of the road for the Internet and net neutrality. Some people, this week, said it’s dead, well, maybe not. We’ll find out about that and we’ll give Patrick a chance to rail on over there. Google buys Nest. AOL kills Patch. Bing firing at Yahoo. Lot’s more to talk about in just a little bit. We have a great cast of non-football lovers on the show today. Myriam Joire, from GetPebble.com, and are you going to Mobile World Congress? I bet you are.
Myriam: Yes, I am. I’m not quite sure exactly what I’m doing yet, but there’s some stuff up in the air.
Leo: You have to come on and help us cover that.
Myriam: Are you going to go?
Leo: Every year I say this event in Barcelona, which is coming up in a month, is the place now where all the all the phones, like the Galaxy S5 will probably be announced there, all the new phones. It really has become the show, plus it’s in Barcelona. But maybe we’ll send Mike Elgan. I can’t go. I wish I could. I’d love to. But if you’re going to be there, please call us and tell us what’s going on.
Myriam: Yeah, absolutely.
Leo: Be our eyes and ears at the Mobile World Congress. Patrick do you go? I mean, it’s just down the road.
Patrick: No, those big shows — it’s so much walking, and you can see everything on the Internet anyways.
Leo: I didn’t go to CES, so I understand. I’m a believer, but this one seems more fun.
Myriam: I think Mobile World Congress is more about business. You go there to discuss partnerships, to work out deals. All the big deals you see happening later in the year are gelled at Mobile World Congress.
Leo: Oh that’s interesting.
Myriam: So that’s why it’s very important to be there because you kind of hear some interesting stories and rumors and meet some interesting people. When I was at Engadget, there obviously are news, but nobody is launching big things anymore. They launch kind of second tier things at Mobile World Congress. All the first tier devices are launched separately with their own events. There will be an event for the Galaxy S5 at some point, and HTC will have something for their phone, et cetera. I think where Mobile Congress shines is if you’re a company like us, Pebble, and you want to have discussions and meetings with people this is where you want to be because this is where everybody is.
Leo: I agree with you. Trade shows now are not as appealing to the big companies. Apple left, Microsoft left CES because they can do it themselves. They don’t want to be in the mass of announcements, they want to have their own attention. We’ll talk about that. In fact, I haven’t asked you guys — I’d love to know what you thought of CES. But before we do that let’s talk about getting out of the post office. Why should you be going to the post office? You know postage rates are going up, that means there’s going to be a traffic jam — everybody’s going to go to buy stamps, except for you because you don’t need to buy stamps because you print your own stamps. That doesn’t even sound legal, but it is! We’re talking about Stamps.com — you literally can buy, print and use legal U.S. postage with your computer, your printer. You don’t need a special postage meter or special ink. You just need Stamps.com. It’s not just buying postage, though, Stamps.com does everything you need to do at the post office right from your desk. The rates are automatically updated. I’ve been told that some postage meters charge you to update the rates. I don’t know how they get away with this. Not Stamps.com — you never have to go to the post office. They were just included, by the way congratulations, in Software Magazine’s annual 500 list Top Software Companies. Stamps.com we’ve been using it here for years to print our own postage, to print right on the envelops, so if you mail out bills or flyers at your business it’ll take the data from your Quickbooks or from your address book automatically add the return address, your company logo and the postage print it right on the envelope. If you’re mailing packages, use that USB scale — it’s awesome. You plop the package on there, it automatically prints the mailing label. If you sell on Etsy or eBay or Amazon or PayPal or any of those sites, Stamps.com will do all your printouts for you automatically. It pulls the address from the website, even if you’re using priority mail or express mail it’ll send out a confirmation email to the recipient automatically. It is true fulfillment. Turns you into a fulfillment house. Now, if you visit Stamps.com, you’ll see an $80 dollar no-risk trial on the front page, but don’t do that. Click the microphone that’s on the upper right hand corner and use our offer code “TWIT”, T-W-I-T, and instead you’ll get $110 dollar bonus value, including $55 in free postage — you can use over the first few months of your account. We’ll send that digital scale, you just pay shipping and handling, I think it’s like $5 bucks. There’s a $5 supply kit to make up for that. And, of course, a 4-week free trial of Stamps.com Stamps.com, use the offer code “TWIT” and stop going to the post office today. What did you think, guys, did you see anything at CES that was of any interest? Were you there for Pebble? Because Pebble made the Steel announcement there, right?
Myriam: Well, that’s what my thing was. I was very busy with pimping Pebble and Pebble Steel.
Leo: So how is that for you? Because last year you went in as Engadget so you were covering everything, this year did you have to stay at the Pebble booth?
Myriam: No we didn’t have a booth. He had a suite with invitation only kind of thing. We obviously briefed the big media, the big important ones. That’s one thing I discovered — it’s hard to pick and choose who you can brief ahead of time, ahead of your launch because you only have so much time and so many time slots to do this.
Leo: So how do you do that? Because I do see some discrepancies. A lot of times new media, like us or websites don’t get the attention like old media like Wall Street Journal or USA Today get, so I’m sure you’re more savvy than that in that respect.
Myriam: I try to prioritize the ones that I know will have the most impact directly.
Leo: That’s the key.
Myriam: And then immediately after the announcement — there were three tiers: the people we briefed ahead of time, the people that got an embargo, but didn’t get briefed and then the people who got it afterwards. And “afterwards” meant that a lot of people just kind of reached out to us and said “Hey we want to take pictures and see it and play with it.” And so I had to, from Monday onward, basically accommodate all these folks until Friday. It was a lot of work. It was very exciting.
Leo: It’s got to be a very different experience of CES, though. You flip sides.
Myriam: Yeah it was. But you know what’s cool, is that I still got invited to a lot of the press conferences that I had managed to actually go to one of them. I just had enough time for one and it was a T-Mobile press conference which I live-tweeted.
Leo: John Legere, what a character he is!
Myriam: I know. The guy is amazing. I had a DSLR plugged into my laptop and I would take pictures and they would get resized and watermarked and sent out to the Internet on Twitter, live. And basically between me and the Verge, we became the two live feeds of T-Mobile’s press conference because people really loved it apparently. I know we weren’t the only ones live blogging, but apparently they liked our pictures the most. So that was a very rewarding experience. I got to play “journalist” for a bit. And I got to get John Legere to say to me, live on stage that I could have anything I wanted. So I’m going to take him up on this.
Leo: Did he say, “Myriam Joire, you can have anything you want.”
Myriam: What happened was it was my birthday that day and he wished me happy birthday before the press conference and at the press conference I was the first person to ask a question at the Q&A. And I said to him “All this is fantastic, but I’ve been a T-Mobile customer since the voicestream days, so what kind of awesome thing can you do for me, like obviously I’ve very happy, but you’re making a lot of people switch now and what do you have in store for me?” And he answered the question. And then at the end he says “Besides, for you, you can have anything you want.” So I was like now I need to try to take him up on this because he said it live.
Leo: He was the CEO, I think, of Global Crossing — button down, crew cut practically, and all of a sudden he’s like the anti-CEO — he’s got a mullet for crying out loud.
Myriam: And a leather jacket.
Leo: A leather jacket. The Washington Post said basically he’s become a troll. He trolls the other CEOs. On Wednesday at CES he was wearing a t-shirt that talked about him crashing — he crashed the AT&T event and got thrown out. Is this an act he’s playing, or is this the “real John Legere”? By the way I pronounce it “Legere”, but it’s “Legere.”
Myriam: Me too. I always said “Legere” and now I have to correct myself because I actually heard him say his own name and it’s “Legere.”
Leo: He has a T-shirt that says “I just wanted to hear Macklemore.”
Myriam: I mean he’s very savvy at marketing, basically. I’m pretty sure he crashed it on purpose, for the publicity. He was invited by Macklemore’s agent so it’s not like he was just there crashing it, he was legitimately there. And I don’t think AT&T handled that very well, I mean come on, seriously? This is how you deal with competition. You’re all friends and you make the best of it. I’m sure he was well behaved.
Leo: He tweets. Is it him, you think, that’s tweeting?
Myriam: Oh yeah.
Leo: It’s not his people? He’s real.
Myriam: He’s also obsessed with Batman. Do you know this?
Myriam: No seriously. He’s completely obsessed with Batman.
Leo: That would explain his Twitter background.
Myriam: So it’s mixed with T-Mobile, making fun of other carriers, and Batman, when you read his Twitter feed.
Leo: This has to be him. This can’t be any corporate shill because it’s too real.
Myriam: I think the guy just decided “You know what, let’s roll with this and see how far we can go.” And it’s working. So that was a big deal — him getting kicked out of AT&T and then the press conference. I’m glad I was able to attend as a journalist for that. And then the other big deal was the guy walking off on stage at the Samsung conference. Michael Bay.So this is what CES has come down to now — screw the technology, it’s all about social media.
Leo: It’s a circus. It’s been a circus for a long time.
Myriam: That’s my takeaway.
Leo: I agree. Patrick, you didn’t go to CES did you?
Patrick: No, I didn’t. But I have to say, CES has not been super exciting for a long time, but I think this time was a little bit more, except for the Michael Bay thing, which was both hilarious and super cringe-worthy at the same time. But apart from that, there were a few things that were... I couldn’t say what specifically, but the Internet of things and wearable computing seemed like they were getting a little bit more real and a little bit more accessible. We’re not quite there yet, but I think this CES was really the time where we’re starting to see that this is not just a sort of buzzword that dies after a couple of months.
Leo: That’s probably the one thing, COMDEX, before CES and now CES, the big trade shows are good for is seeing the manifestation. Convergence was the watchword for 10 years and finally you started to see it at CES a few years ago, where the convergence of digital technology and television of Hollywood. The idea of tablets — you first saw tablets at COMDEX 10 years ago with Microsoft and it slowly evolved and you could see that happening, and you knew when it was really taking off because it became the issue. eBook readers at CES 3 years ago — everybody had an eBook reader. So this year, it’s wearable tech and you’re in a good position for that, Myriam. It’s wearable tech and the Internet of things.
Patrick: Yeah it seems so. And obviously it’s probably going to keep evolving and if it actually takes off, the things that we’re probably going to be seeing in 2, 3 years are probably going to be a little bit different from what we’re seeing at CES, but just in the same way that the actual tablets we’re all using now were different from the ones that we were seeing 10 years ago. And also, there were a bunch of French companies that were presenting things, you know, essential Internet of things items, like the connected toothbrush...
Leo: There’s a lot of that crap. There is a lot of that stuff.
Patrick: There are things like...
Leo: That’s kind of the point I’m making is you just can see that it’s going to happen because everybody is throwing stuff up against the wall that are, in most cases, dumb and stupid like, remember the Kobo and all of those readers we saw years ago? But you knew, well this must be a big thing because everybody’s trying it. And everybody had watches that connected everything. Refrigerators...
Patrick: There’s one that was actually pretty interesting in the concept. A friend of mine, another French podcaster, alerted me to it, it’s called Mother by a company called Sense, it’s a French company as well — the guys who did the Nabaztag, connected bunny thing.
Leo: Oh yeah, I liked the Nabaztag. That was fun.
Patrick: And so it’s a base station, with I can’t remember, maybe up to 20 little sensors that are called “cookies” — they’re tiny sensors, very flat and like this. They’re colored and you can put them and use them anywhere and they’re going to be interpreting the data depending on where you put them. So you could put one in your kid’s backpack and you know where they are. You could put one, for example, on your fridge door, and you would know how many times things are being opened. Or on your coffee machine and it knows how many times you’ve had coffee. You also have one, for example, under your bed so it knows if you sleep well or not. And then it can correlate the data and tell you “You know what, these five days over the last month where you didn’t sleep very well, you also had coffee two hours before you went to sleep.” So that’s an obvious one, but it’s the kind of quantified self. And by having all of that data we can learn more about everything we do and maybe make a difference.
Leo: Do I have to eat one of them for it to know what I...?
Patrick: You can try. I’m sure you can try.
Myriam: My takeaway from CES was it’s always nice to see people in person. And for that alone, trade shows are really awesome.
Leo: Yes, that’s what it’s really all about.
Myriam: And then the other thing was, you know I feel the same way as you — I didn’t really see anything that blew my mind, I mean it was obviously a very good CES for us, but I worked really hard to make that happen. And then the TVs — those curved TVs are pretty gorgeous, I mean, you know of course they’re very expensive, they always start out very expensive, but eventually they trickle down.
Leo: You know I have one.
Myriam: You have a curved one?
Leo: I have the curved Samsung OLED.
Myriam: Oh my goodness.
Leo: But that’s Samsung, see now I need a new one, because Samsung announced at the show, one that you can uncurve with a remote control. That’s just stupid! You press a button, it goes “zzzzzzzzzz”.
Myriam: Party trick.
Leo: You know, it’s all about impressing your neighbors. That’s all it’s all about. When people come into the house, they go “Oh your TV’s curved.” And I go “Yes.”
Myriam: I was very excited. I went to the show floor for about a half an hour, that was about the amount of time I spent on the show floor and they had at the LG booth this gigantic washing machine, fake washing machine. And everybody was getting their picture taken in front of it. That’s how excited I got about things at CES.
Leo: What? Why?
Patrick: A giant washing machine?
Myriam: Because they were trying to sell some kind of smart washing machine, connected washing machine, whatever, and they had this gigantic one where it was an invitation to make fun things.
Leo: So really the big story didn’t happen at CES, was Google buying the Nest company. Tony Fadell, of course, former Apple vice president who oversaw the production of the iPod — people say he designed the iPod, he did not design the iPod. However, he hired about a hundred great designers from Apple and other places. The Nest is beautiful, it’s got intelligence, it knows when you’re home, it’s on the WiFi so it can tell what the weather is, and it supposedly smartly conditions your home, heat or cold. I had one, I didn’t bother reinstalling it when we moved because it’s like, big deal. And then now they do a talking smoke detector that says “Your battery is low.” Or you can look on your iPhone and it’ll say “Hey there was no fire last night.” Oh that’s good news. It’s an interesting company. I don’t know if it’s worth 5.8% of Google’s total cash position, 3.2 billion dollars. Why?
Myriam: Well, here’s my theory.
Myriam: Do you want my theory?
Leo: I want to know why Google bought Nest.
Myriam: Honeywell, the big traditional thermostat fire-detector maker was about to sue them for a lot. And somebody thought “Hey we can have a whole bunch of cool patents and there you go.”
Leo: So it’s interesting because Google paid half as much for YouTube, 1.6 billion.
Myriam: And at the time, we thought it was insane, remember that?
Leo: At that time it seemed nuts. And YouTube was about to get sued out of existence, remember? There was some question whether YouTube could continue because they were really raising the eye of content creators. I think one of the reasons they sold is because of Google. You got to think that there is some relationship there, that Tony Fadell getting sued or threatened lawsuits from, not just Honeywell, but First Alert, and others, I think, was a little nervous about the future. I completely understand why Tony Fadell took 3.2 billion, that’s not a question mark, but what is Google planning? Are they planning to make a big connected home initiative?
Myriam: Well it goes back to this Mother announcement, right? It’s like you have sensors all over the house. They give you data. Google wants data. They want to know more about you. Right?
Leo: They know when you’re sleeping. They know when you’re awake.
Patrick: It seems pretty clear that one of the next directions that all of this, computers everywhere thing is going to take I think, is the internet of things as we were discussing just now.
Leo: Does this solve a problem though or is this a lot of crap?
Patrick: You mean the internet of things in general? We don’t know yet. But there is a possibility. Everything seems to be going in that direction and it seems like it could bring a lot of intelligence.
Leo: You know what happens though? We here in the tech industry say well everything is going in that direction. Let’s follow that train. But consumers go; “Well I don’t know.”
Patrick: Well that is possible but on the other hand Nest is going pretty well. What they know how to do is design in that area, in that industry. Google is getting better at design all the time is now famous. You know that phrase. “Google is getting better at design quicker than Apple is getting better at the internet.” And they’re getting better very, very, fast. The Nest appliances – and maybe they have other – on the drawing board, but the Nest appliances are very well designed. And as everyone knows design is not just the way it looks but the way it works. They are doing extremely well in that area. So it might be that in exactly the same way that they bought YouTube, they could feel that something was going to happen there and they were thinking; You know let’s give these guys the free range to do the things they want to do and this is obviously going to become something. So we have a head start. Then on top of it they can help on the design of other Google products in general, which is not a bad thing either. I don’t know if the price is right but I certainly understand why they would want to buy a company like this.
Myriam: I agree with Patrick. It’s obvious to me that they have all this design and hardware manufacturing expertise and Google definitely wants more of that. Then of course the patents, the date and Google ventures – they had already invested in it. You don’t want to see something you’ve invested into that’s doing well that can return you a lot of data and a lot of perks. Like the ability to do hardware and good design and have that bogged down by some gigantic law suit that they can’t afford to fight right? So I think to me that makes sense.
Leo: It could have been a white knight. You’re saying they swooped in to save them.
Myriam: I think so. That is part of the story. But I think what was more interesting to me was the reaction to this acquisition by the media.
Leo: People thought it was Google spying on us.
Myriam: Are you kidding me?
Leo: Google has a little red eye now in the living room.
Patrick: There’s a potential for this to happen but do you really think it’s that big of a deal that Google can, in fact that Nest already has access to things like your temperature or time in your house, when the furnace kicks in or out and other stuff with the fire detector. I mean seriously!
Patrick: That’s a lot of data for Google to have.
Myriam: But you’ve already signed your life away.
Patrick: Yes technically. That’s the thing; if you’re worried about Google spying on you then you probably should be worried about Google spying on you already.
Myriam: So stop using Facebook okay!
Leo: I had a Nest and you get a Nest energy report which is kind of cool. It tell you stuff, not useful stuff but stuff, for instance all Nest thermostats have saved, they say 1.4 billion kilowatt hours. That’s enough energy to power all the tablets in the U.S for a year. I haven’t used my Nest in a while. Let me go back and look at an older Nest energy report because like I said I didn’t reinstall it. This shows you this month you used 2 hours more than last month. WOW!
Patrick: This isn’t incredibly interesting or useful information but once everything becomes data and Google can study it and get you some value out of it, it can become interesting. It’s easy to make fun of it now but when the home becomes – Let’s create a new buzz word. When the home becomes the “quentified” home and when everything is “quentified”, then I’m sure you can – well I’m speculating but I’m sure you can extract value out of it.
Leo: With some data I don’t feel it’s a privacy invasion. I mean does Google really care when I’m home and when I’m not home? I don’t know. You’re right, that became the story though Myriam. That definitely became the story.
Myriam: And they’re over reacting. It’s silly.
Leo: Oh by the way in July I earned 31 leafs. That’s a leaf a day. That put me in the top 5 percent of “Nesters”. I’ve earned in the year 2006, 206 leafs. I don’t know what a leaf is.
Patrick: Can you exchange them for –
Leo: Nothing, no. Oh now that’s an idea. I wouldn’t mind that. By the way, good news, people with piercings and tattoos can now work in the T-mobile store. You must be pretty happy about that Myriam.
Myriam: Well you know actually I have something interesting to say about that. When I first moved to the west coast from Toronto to Vancouver it was the mid 90’s and a time when body modification was starting to become a big thing I guess. I remember for a while there you couldn’t get a job if you had a tattoo or a piercing, right? And Seattle was really the first place that changed that. Eventually they got to a point in the late 90’s that so many people had tattoo’s and piercings that they couldn’t find anybody to do the job, to work at the cashier at QFC so they had to break down and accept it. I remember noticing that really obviously when I first visited Seattle in the late 90’s. Eventually I lived in Seattle. You know it doesn’t surprise me – actually what surprises me about the T-mobile thing is that, you mean just only now this is happening!
Leo: So you go in and you’ve got a piercing and they go; “Sorry we can’t use you”. Now that’s changed. I’m reading Brad Stone’s book about Amazon, which is great, “The everything store”. It says one of the things Jeff Bezos did, when they were hiring people for the fulfillment centers in 98 I guess this was. He told the temp agencies “send me all your tattooed pierced people”. All the people who can’t get jobs, I will use them in the fulfillment center. So he might have been one of the reasons Seattle started to open up for that. So that people could get work. So credit Jeff Bezos of all people.
Leo: We’re going to come back in just a bit and talk more. I guess the FCC net neutrality issue will be our next topic. So prepare your rank, get the blood pressure up, start --- hold your breath, blow out. Our show today is brought to you by GoToMeeting, if you have a client that is holding his breath GoToMeeting is very useful. GoToMeeting is the best way to meet online. Not just with client or co-workers, anywhere in the world you can share the same screen; you can see each other face to face with HD video. I’ve got to tell you GoToMeeting is a great way – One use case, if you’re pitching somebody and you’ve got a power point presentation, they can see your presentation, they can hear you of course because you get a free conference call. You get a line with it as part of the deal. They can see you but more importantly you can see them and I’ll tell you if you’re pitching somebody the body language, the reaction you’re getting really is important stuff. You don’t want to leave that out. It’s great if you have co-workers all over the world as we all do now. I know teams who use GoToMeeting all day because you pay 1 low flat rate for as many meetings as you want, as long as you want. So it’s very economical. You’ll increase productivity, you’ll improve communication and you’ll eliminate wasted business travel. It’s nice to not have to do that. GoToMeeting, you can even use it on a mobile device, you can present from an Ipad. You sign up for GoToMeeting on your computer or mobile device right now by visiting gotomeeting.com. Start the New Year right with a free 30 day trial. No credit card needed. That’s nice. Just sign up. Gotomeeting.com, click the try it free button. Please if you would use our offer code TWIT. You have to click that link that says you have a promo code. Put in TWIT, that way they’ll know you heard about it on “This week in Tech”. GoToMeeting by Citrix, they just make it better and better all the time. It’s a really great way to present, to meet and to collaborate online.
Leo: So, this is kind of a complicated story and I think a little bit misrepresented. A federal appeals court told the FCC that no, Verizon had sued them saying the FCC cannot enforce net neutrality and the court said yes. But what the court – and all the headlines were like “the end of net neutrality” it’s over, net neutrality is dead. I think it was more nuance than this. Patrick you say you have a rant? So let’s hear it.
Patrick: My rant is a little bit about the result probably of the judgment. Maybe you want to explain how it all went down?
Leo: Yes, so a federal appeals court – there’s a good example, what is that… the verge? The wrong words: How the FCC lost net neutrality and could kill the internet.
Patrick: Okay so the headlines of it are sensational but I think Nilay's article is dead on. It really shows what went wrong and how it went wrong. Net neutrality certainly is at a risk but it would be quite as spectacular in my headline, but hey.
Leo: This goes back to the previous chairman, the current chairman I’m not convinced is a fan of net neutrality either. Tom Wheeler is a former lobbyist for the cable industry. The previous chairman, Julius Genachowski, an Obama appointee apparently made a tactical mistake. They did not classify broad band providers as common carriers. A common carrier is someone that just passes information through the internet without preference. The court said that since you haven’t declared these broad band providers as common carriers you have no jurisdiction. The FCC does not regulate and so you cannot enforce these rules. In fact the judge writing the opinion said; “net neutrality is right, these are the right rules, but we cannot – the law is very clear. Judge David Tatel said the FCC should have authority to regulate service providers but until you say that they’re a common carrier Congress is not giving you that power. Basically that was Verizon’s argument…this has to be regulated by Congress. Congress did not delegate that power to the FCC. The judge wrote “the commission is adequately supported and explained his conclusion, that absent rules such as those set forth in the open internet order, the net neutrality rules, broadband providers represent a threat to internet openness and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment.” The judge even said the broadband companies even have a lot of financial incentive, to discriminate on the internet. But, the FCC doesn't have jurisdiction here so they can't stop it. What that means – I don't think it's the end of the end of the internet, or net neutrality, but merely the FCC does not have the right to regulate it. Congress does, and I think if you care about this – and you should – because we're already seeing AT&T propose things that absolutely violate net neutrality, then you should go to your member of congress and say we need either to give FCC this power, or you need to assert this and adopt this open internet order and enforce it.
Patrick: With the current situation, there are probably a couple of things that can happen, I think in order to prevent the nightmare scenario that a lot of people are putting forth after this decision, first the FCC could try to re-classify the – the French word is coming to me – the internet providers, and classify them as common carriers. They didn't do that in 2002 as Nilay Patel's article explained, and that was probably a little bit of – they didn't want to fight what would have been a huge fight. But if they want to do it now, it's going to be an even bigger fight! And it's going to be extremely difficult at the least. The other thing that could happen is that they could go on a case by case basis, if things go bad, and if some of the service providers start doing deals that are really hurting the internet and public interest, then they could regulate on specific instances – that has not been prevented. Either of those things could safeguard the internet as we know it. My strong reaction was to the arguments that came out after that decision was made, from a lot of people who were saying “Actually, we don't want the FCC to regulate the internet”. It's one of those “I don't want the government regulating things because the government can do anything”. So first of all, the cord said actually the argument is valid. There is a danger there and it probably should be regulated – that's the first point. And the second point is, it always irks me significantly when people say “We don't want X to regulate Y” because some things need to be regulated. You need to regulate the roads – you can't just do anything you want on the roads because there is a public interest in making sure things go well when you are in your car. In my opinion and I think everyone who is listening here's opinion, the internet is a public utility, there's very little question about this, it's the same as electricity or running water – it's infrastructure, there's no question about this. For infrastructure, we need to make sure that not everything goes. You know the words “Socialism” come up very often and that might be taking it too far maybe, but I come from a country where some parts are socialist, where things work really well. So it's the kind of absolutism where you decide that regulation is bad everywhere, and that's really for political gain, it's a political agenda. Some things shouldn't be regulated, I absolutely agree, but some things should be regulated. The internet is clearly a thing that needs to be safeguarded...
Leo: But do you want... You're a French person; do you want the American government to regulate the internet?!
Patrick: They've been doing a fine job until now.
Leo: I tell you what, let’s get Denise Howell on the line now, I think that “This week in law” did a very good discussion on Monday of this decision. Having a lawyer who understands these issues will be very good for us. We're going to try to get her on via audio, if she can give us just a few minutes... That's part of the debate; by the way, do you really want the government, any government, regulating the internet.
Patrick: There's a key point there. When you say it like this, you make it sound like they're going to go in and decide who can do what, and who can … this is alright , this isn't alright... they're just saying the internet should work the way it's worked until now, and everyone's information should be treated equally. That's not a really strong regulation. It's not like you start enacting 10 million different laws, and deciding who can do what, where, when and how.
Myriam: I want to say, I agree with Patrick, and part of it is because I'm Canadian and French as well. The reality is this: The carriers and cable/internet providers should be dumpipes, right? That makes them utilities instantly. The FCC should have the power to slap them on the wrists if they start slowing down Skype traffic, or slowing down Netflix, because they have a vested interest in some other place. That’s exactly what I mean when I think of regulation. It’s not so much say; we’re going to control the internet. It’s more like if you mess with this, we’re going to mess with you back because we don’t think you’re taking into account the betterment of the U.S people. That is very important.
Leo: Yes but you both come from Socialist Countries. Let’s get Denise on because I have one question. Hi Denise Howell; Thanks for joining us, host of “This week in law”.
Leo: I appreciate you doing this on short notice. My first question is; Why doesn’t the FCC simply declare broad band providers common carriers and then say, by the way these are the rules?
Denise: Well the common answer to that question is that it would be really, really, politically difficult on the FCC if they did that.
Denise: That they would face a lot of opposition on that front. There is a perception that –
Leo: What are the implications? What happens if they’re carrier. Why is that tough?
Denise: Some people think that there’s a lot o more owner regulation that will follow given that definition. And some people think “no, no, no the FCC can do plenty under the other designation and it really doesn’t make much difference” so people say that it’s a political decision with that designation. Personally, I have a hard time thinking information service, telecommunication service, how do you call the internet or broadband services either one. I have a really hard time getting my head around that and putting it into either one of those boxes.
Leo: If they are a common carrier that means that like the phone company, they are not responsible for the data that goes over the line. That you can’t go sue the phone company because somebody plotted on a telephone call to do something. It’s not their fault; they are a common carrier. Seems to me the internet should be a common carrier. I don’t see why AT&T would even want responsibility for the bits that go over their internet.
Denise: Very much section 230 of the Communications Decency Act is a huge umbrella for all kinds of unlawful activity that ISP’s could otherwise be held responsible for.
Leo: So who doesn’t want them to be called common carriers?
Denise: I believe it’s the TelCo industry in general.
Leo: They themselves don’t want to be classified that way. Because they would lose the…
Patrick: Because if they were classified as common carriers they couldn’t do that deal that we’ve been hearing about where they will ask certain services to pay for the bandwidth. That was actually a great conversation on This Week In Law. There were excellent points on both sides of the debate but it seems very clear that the only reason that these TelCo’s would not want to be classified as common carriers is that they want to treat different types of data differently. And they want to extract more money out.
Leo: They don't want that neutrality. They want to to do like AT&T is doing with their sponsored data plan. They want to say to NetFlix, “If you were to give us some extra money we could tell our customers that you don’t cost anything and they’d use you more” and say to YouTube or Twit: “By the way, you didn’t give us any money so you’re going to cost more to the customers” that’s exactly what we’re afraid of happening.
Denise: Right. But I’ve gotta say that I’ve always been a huge advocate of that neutrality and I’ve always been sort of viscerally drawn to the concept that we need regulation to make sure that those deals don’t happen. But having had the discussion that we had on Twil this week and having gone through a bit of the DC circuits, decision and reasoning on this, there is something to be said for letting the market make a bit of the decisions on this.
Leo: Is that what Judge Tatel was proposing?
Yes. There was a huge emphasis
on, “What can you do, FCC, under your mandate and
authority?”. So less a question of
laissez-faire and what is the market going to do as far as the court is
concerned, but that is the impact and we now have some opportunity to let this
play out and yes, I am concerned that networks like ours… or, you know ours is pretty well established but even more fringe
kinds of start ups will be impacted by these sort of sponsored data deals. But the only way that that winds up having a
really detrimental impact is if people jump on board and say, “Oh yeah. All I need is
who’s in the sponsored data plan and I don’t want access to the full
internet”. It’s really going to be
consumer demand that drives this. And,
Leo, do you really think that people are going to turn their back on having
full internet access?
I mean, don’t you think that people have been conditioned now that they
want access to whatever they want on the web?
Leo: I think it influences people’s decisions. People are economic entities. And I think that if you, as a user, know that you could watch videos on NetFlix and it won’t go against your data cap or cost you money, but that if you watched the same video on another service it will; you’re going to choose NetFlix every time. Now whether people will watch Twit, and I don’t think it effects Twit particularly, but it very well might effect new companies coming into the business who would have to make that calculation, “Gosh, if I’m not willing to pay AT&T for sponsored access, am I going to be disadvantaged?” And a new company might very well be.
Patrick: You’d have to pay AT&T and then you have to pay Verizon… all of them.
Leo: Right. And I can guarantee you I’m never paying nobody for nothing!
Patrick: You’re already paying - its double dipping.
Denise: If its winds up being a problem there is plenty of opportunity and the court gave the FCC a road map for how it can righten the neutrality rules that will be enforceable. And if it wound up being problematic and fringe players were being edged out then I think that the FCC would step in.
Leo: That’s the key. That’s why I don’t feel like its such - did you read Neil Ize article, Denise?
Denise: I haven’t yet and I’m glad that he looked at this in depth.
Leo: He felt like it was a much more negative thing than I feel you thought it was, and your panel thought it was on Twil. Which is that they gave them a road map, “If you want to enforce this you can - this is how”. Or maybe it’s up to us to write Congress and say, “Congress needs to either empower the FCC to do this, or write its own regulations”. So do you think it’s prudent just to say, “Let’s wait and see if this becomes a problem and then act”?
Denise: I do. I think this is a wait and see. And also, there could actually be some beneficial aspects to this. First of all, one thing to bear in mind is the wireless and wired are already treated differently as far as the FCC’s authority to impose net neutrality limits.
Leo: For good economic reasons. Technology is very different.
Denise: Right. So wireless is already sort of the wild, wild West as far as what the TelCo’s can do. You noticed that AT&T announced their sponsored data plan at CES before this decision ever came out.
Myriam: I want to jump in here. Because wireless is the stuff I know the best. You’re right. This is why I’m not too freaked out about this is net neutrality is never really officially existed on wireless. And it doesn’t seem to be a huge issue. Obviously there are many issues of wireless and as of right now and I’d like the price to go down significantly and that’s not the case. But there is a big, big, big, huge difference between internet service providers that are wired like Comcast and even AT&T which provides fiber and DSL, to the wireless companies. Because even tho they are one and the same in many cases the wireless spectrum belongs to the US people and let’s never forget that the FCC’s job is to regulate that. And I don’t like the fact that the FCC has no way to enforce anything. And that is my problem and I think that this just reinforces the fact that the FCC is worthless in the US.
Leo: You’ve made such a good point. Because this is our airwaves that the wireless providers are using. And it is absolutely FCC regulated. They auction the air waves off, they give people the right to use them. Why couldn’t the FCC approach it that way, Denise? At least with the wireless carriers?
Myriam: The last mile for many people that are on a key level like those who get internet to their house is often wireless nowadays. So it means it uses these FCC spectrum and this is my whole argument about this.
Denise: Yeah and I think going forward, certainly wireless is the way things will be and the way people want things to be . Wired is very, very important. Wired is libraries and businesses and homes and schools as we sit here today. That is a huge chunk but, as we move forward all of those established wired internet access points are going to move more toward wireless. And I think that’s something…. but I am not the person to sit here and try to explain FCC’s authority and mandate. That’s not something that’s very much in my wheel house and I encourage people to go check out our last episode of This Week In Law where we had two very good law professors on this point. They didn’t really address that particular issue but they’re people who would be much more able to address that than I am. But I do think it’s a good point that the FCC’s authority is certainly fluid and that’s why this decision has been so up in the air for so long and until the case was argued it wasn’t really clear how this particular federal court was going to rule on it. It’s kind of an open question.
Leo: Will there be an appeal? Will the FCC go to the Supreme Court on this?
Denise: It’s possible. But there hasn’t been any statement by the Chairman that that is going to happen.
Leo: And there is no guarantee how this is going to come out. Seems to me the rule of law the Appeals Court argued is pretty clear and I would guess the Supreme Court would not overturn, would not even review it.
Denise: You never know what the Supreme Court thinks is an important enough issue. And if the District Court has trod all over the authority of the FCC or if that is even a possibly, they may well take it up.
Leo: Denise Howell, the host of this week In Law. Do listen to Friday’s episode for much more on this subject. Its such great subject. Glad we could get you on in such short notice. Thank you Denise.
Denise: Thank you guys. Bye.
Leo: Meanwhile, the world is wrestling - what do you call it? WWE, World Wrestling Entertainment, announced at CES, “Watch out NetFlix, we’re going to stream for $10 a month unlimited”. Wrestling on demand! And they are doing it with peering arrangements so they are avoiding this whole issue which is kind of interesting. I just think it’s so technical and so interesting but I did want to really, at least say, it may not be the end of the world, folks. That despite all these headlines that say net neutrality is dead. I think it is far from dead - its not dead yet.
Patrick: I think that is a point that This Week In Law makes very well. There are certainly other ways that if things go bad the FCC could correct the coarse in other ways. But there’s no… I’m not going to launch back into it.
Leo: We have to defend the internet.
Patrick: Exactly. And that is the thing. There is no good comes out of the service providers being able to treat bits differently. No good at all.
Leo: I agree.
Patrick: There’s no upside, so that’s what upsets me the most.
Myriam: I think Denise brought a really interesting perspective into the discussion. To me, because right now wireless is not net neutral, there is no regulation on wireless, I’m not too concerned that they’ve upheld this. I don’t think it is going to change too much. I’m not an alarmest about it. It’s kind of a wait and see attitude for me. What I do wish though, and it bothers me that this ruling happened the way it did, is that the FCC from years and years ago, doesn’t have any power in this country. This goes back to what Patrick was talking about, “Should the government have that power”. I think it should if it owns the airwaves. If the people own the airwaves then the government should have that power.
Leo: That was such a good point and I’m really glad you made that point. That is our own resource.
Patrick: That’s the thing. If not the FCC, who is the representative of the people and the government, then who is going to say what you can do with them? If you don’t want the FCC to do it, then sure no one’s ever going to say anything about it.
Leo: I think anybody who has lived in America for any length of time knows it is not the government who gets to decide these things, but commercial interests. Politics are absolutely a balancing of the commercial interests.
Patrick: Which works out fine in many ways. I don’t want people to think that I’m this weird communist monster, I think it works out fine in many ways, it’s just that in some specific instances the free market can go askew a little bit.
Leo: I absolutely agree. And there are some very clear places where government regulation doesn’t…. the antitrust law is one and I think frankly internet neutrality is one of them. Anyway, good discussion. Listen to This Week In Law - really fabulous. We are going to take a break. Coming up, some interesting things this week. In fact, Amazon says they are going to announce a product that is bigger than the Kindle. I will give you a chance to think about it and I will ask you guy (and gal) what you think could possibly be bigger than the Kindle. Before we do that let’s see what Mike Elgan is planning in the week ahead. Mike.
Mike Elgan: It’s a big week in the earnings reports. IBM and Verizon have a call on Tuesday, Ebay and NetFlix on Wednesday, Microsoft and Nokia on Thursday and Samsung on Friday. The North American Bitcoin Conference starts Saturday in Miami, Florida and, yes, attendees can pay for their reservation using Bitcoin.
Leo: How much Bitcoin do you have Patrick?
Patrick: I have about 0.00 Bitcoin.
Leo: How about you Myriam? How much Bitcoin do you have?
Myriam: I done have any.
Leo: I have seven. Seven!
Myriam: Wow! Seven?
Leo: Because we put on the front page of the website, “Donate by Bitcoin” and people have generously donated seven Bitcoins and I’m going to hold on to them until they are worth $40,000 each and then I’m retiring!
Myriam: Good idea. That’s really smart. I think I’ll do that on my blog. That’s the best way to get them.
Leo: By the way, it’s absolutely impossible at this point to do any Bitcoin mining. It’s just gotten out of control. You have to have a huge amount of power. I read this article in the New York Times about this guy and that’s all he does. His whole house is taken over with cooling and big Asic computers - it is crazy! Crazy!
Patrick: It’s probably costing him more in electricity than what he’s going to make on the Bitcoins he’s getting.
Leo: It’s basically crazy speculation. Is that the article? Maybe it was in Business Week. Oh yeah, it was. It was written by Ashley and Brad. We had Brad on and that’s why I noticed it. It is crazy stuff. We’ll talk about that and a lot more. So, what is Amazon up to? But first a word from my favorite, favorite place for audio entertainment and no, it’s not Twit.tv, although that’s pretty good, its audible.com. The best store for audio books, it is such a life saver. I’m such a huge fan of audible.com; I first discovered them when I was commuting to San Francisco spending 2 and 3 hours a day going to TechTV and Audible probably saved my life, kept me from road rage, from crashes, from falling asleep. I’ve listened to over 500 books on Audible. I can so hardily recommend audible.com. The Bradstone book I just mentioned, The Everything Store, really interesting book about Amazon and Jeff Bazos. Did you know Jeff Bazos biological father was a circus performer, the number one Unicyclest in all of New Mexico?
Myriam: That explains everything!
Leo: It does! It does! It’s also a good business book. It talks about all at the decisions that Bazos made all along. Look, here’s why I’m mentioning this. First of all, obviously Audible is the sponsor, but if you go to audible.com/twit2 you can get two books for free. What we are going to basically do is set you up with the platinum account, that’s two books a month. But the first 30 days are free, pay absolutely nothing and cancel any time and those first two books will be yours took keep. The Everything Store would be a good book to start with. My next book is going to be Dogfight, Fred Vogelstein’s book about Google and Apple. If you are interested in Tech, in the last year there has been a spate of great books; hatching Twitter from Nick Bilton, Leander Kahney, Jony Ive book. But there are all sorts of stuff. There is fiction, non fiction, science fiction. Really there is no limit to the kinds of audio and entertainment you can get. In fact, frankly at this point, if a new book comes out it’s not only going to come out in paper in a book store it is going to come out on audible.com, which is really fun. I haven’t read this, but the Chat Room is saying I should read Robert Gates memoir Duty, which just came out. It talks about his experience as Secretary of Defense for both George Bush and Barack Obama. It should be very interesting. I’m going to put that on my list too. I love this on the upper right of my page, I have two credits available. I love that feeling. Because I also have a platinum account. Two credits a month and I think, “what am I going to listen to next”! I want you to get those two credits for yourself. Go to audible.com/twit2 and do a little listening at Audible. I think you’re going to like it. And you know what, if you don’t like it, no big deal. Cancel it and remember the first 30 days you pay nothing. There’s scary books too. Look at this: Hollow City: Miss Peregrine’s Peculiar Children! If you’ve got a teenager or young adult at home, it’s a great way to get them into reading. audible.com/twit2. Thank you Audible for your support.
Leo: So, Amazon has got some big announcement!
Patrick: Twelve inche Kindle!
Leo: No, they did that already. Didn’t they? And they killed it.
Patrick: That was the DS, it was 10 inch.
Leo: Oh, it was too small huh?
Patrick: Okay. Fifteen inch Kindle then.
Myriam: That’s a little bit too big!
Leo: I think it could be a smart phone.
Patrick: You think?
Leo: So this is coming up Thursday, December… Wait a minute. That is the old one. When is the announcement? I’m going to have to find out. I think it’s coming up in the next week or so. They say the guy… they say it's going to be, bigger than the Kindle. I'm waiting for this announcement this… the smart phone announcement. Don't you think they could do a free smart phone, or a very, very cheap smart phone.
Myriam: Oh yeah. This has been a long lasting theory of mine.
Leo: And Besos is certainly ambitious enough. January 30, that’s the date, so we have a little time. It’s called the V1 product. It’ll be in Boston. It’s from the KNI team, the Kindle New Initiatives team. What if it were a Kindle phone?
Myriam: Kindle Watch! Just kidding. (laughs) So Kindle phone, I’ve had this theory that they can use whisper net to provide, you know, basically a free phone, or almost free.
Myriam: And a get subsidized. But then again, it brings up the whole necrology discussion we had, because my theory would be that we do this, but that you don’t buy, but you can buy more. The same ways you can buy with Kindle right now. And you can buy these subscriptions, and you’re like, I want all the books I can eat. So it’s like $5.99 or $9.99 a month. Right? And then you add… it gives you basic data, you know, very simple, like 100 gigs free like Google does. And Kindle does on their tablets. But then, you know, you basicly don’t pay for data amounts, you pay for, like, features. You want Amazon video, you pay five bucks.
Myriam: So that’s what I see them doing and, unfortunately, it goes against anything we want. You know, keeping things net neutral. And if anybody is going to destroy net neutrality, it’s definitely Jeff Besos.
Leo: (laughs) No! Jeff’s a good guy!
Myra: I know Jeff is a good guy! I like Jeff. But I’m just saying, if anybody can find a good way to make it work.
Myriam: And then it sets an example that we don’t really want to have.
Leo: Well they’re in a unique position, and you compare this to Apple. Amazon said… Besos said, “We don’t have to make money on the Kindle. We make money when you use the Kindle. Which is very difficult for a company like Apple to compete against, they have to make money on the iPad with every sale. They make a little money afterwards on the itunes store. But nothing like Amazon could make. And I think they can do the same thing with the phone. It would be probably an Android phone, with a Amazon unique skinning, as they do with the Kindle, because that’s Android. That avoids the cost of the operating system, they can probably make it very cheaply, and if it’s a gateway to purchases on Amazon… And, by the way, I mean, it’s not just books anymore, its movies and TV shows. Amazon streaming is fantastic.
Patrick: How about they give you a phone with your prime subscription.
Leo: Perfect example.
Myriam: And if you want unlimited internet, you can pay more. Because this is a window into Amazon ecosystem, so when you get the phone, you get phone calls you get, you know, access to maybe, you know, some basic internet stuff and access to all the Amazon stuff. I don’t see him giving the Internet for free.
Leo: No, but as you said with whisper net… For people who don’t know what that is, your Kindle is automatically, forever online. I think it’s Sprint they’re using, right?
Myriam: Not anymore, I think it’s AT&T now.
Leo: AT&T okay. So it’s a crappy browser, you know, it’s not like you can really use it for internet access, but you do get kind of…
Patrick: You are talking about Kindle OS, which is the Kindle Fire. But the whisper net…
Leo: Only on the E-readers.
Patrick: an e-reader exactly. So it’s not like you get the internet for free on your kindle fire, but really, it’s essentially...
Myriam: But really, you do, you do. Do they have the LT1? The XT, doesn’t have free data and then if you pay more, you get more free?
Leo: A few hundred megabytes, something like that, yes.
Myriam: That’s what I’m talking about. I call it whisper net, but to me whisper net is anything that basically gives you free data, to kind of hook you in.
Leo: And, of course, who’s going to carry it? Tmobile!
Myriam: Uhh, I don’t know, I think they have enough of a deal with AT&T that I’d just be surprised to see them changing it. Here’s my theory. You will never know which carrier they use.
Leo: That’s right.
Myriam: If Besos does it right, this is an Amazon ecosystem, fully integrated thing, you won’t even know, and they can change the carrier any time they want. Because they don’t care, they want you to pay Amazon, or part of you prime subscription, or whatever. And here’s my theory, if it succeeds, you’ll see Apple do the same thing. What you’ll see is Apple will walk to AT&T and Verizon with $10 billion in cash, and say, “Here, give us all the data you can give us.” And basically support all this network wise, and we will sell iPhones and iPads, and other devices on at the Apple store that people pay through iTunes to get connectivity to the Internet.
Leo: Oh, I don’t know.
Myriam: and then,you know, what’s going to happen is, if that successful if AT&T or Verizon makes money with this, I think it will be AT&T by the way then they’re going to say to Verizon, “Here’s $10 million we also want you to be a provider.” And will all make a switch, based on what signal is best. And then we’ll talk to international carriers, and you’ll be able to use your iPhone and iPod anywhere. And…
Leo: are you fantasizing now? This is fantasy!
Myriam: I’ve been thinking about this for a long, long time! I’ve talked about this on many podcasts. It’s very possible. And the only need a spark, and the spark is Amazon and doing it, and doing it right. If you have that, then basically what happens is the carrier really become the down pipe, because you pay Apple for your dealer service, and whether you pay Apple per megabyte or per minutes…
Leo: Oh. Don’t you report that either!
Myriam: but I’m not saying it’s right I can just say I can see this happening.
Because Apple has full control of the user experience, right?
Myriam: And when you go to Europe, your phone just works. You don't have to do anything! It picks the best carrier, and then at the time, wherever you are, and you”ve paid for this as part of your iTunes subscription.
Patrick: I don't think people going to Europe is a big enough problem for Apple solve, that they will need to do…that they will need to enter that incredibly complex…
Leo: I think all these companies understand that international is the next frontier.
Myriam: You know, TMobile gave away an international edge to everyone.
Leo: Yes. It’s only no edge, but it’s something and it makes me… and that the phone I’m carrying. I’m never again paying AT&T for international roaming.
Patrick: But the answer is to reduce the roaming costs, which are ridiculously inflated.
Leo: Even that happening right now, in the EU, am I wrong, Patrick?
Patrick: No, you’re right. One of the examples of the regulation being positive is EU is imposing on phone service providers, all over Europe to…. Ultimately, in a few years they won’t be able to charge for roaming, more than they do in their local country.
Leo: So basically it will be one big region, and you can use any carrier in the EU.
Myriam: But see, you’re missing the point, Patrick. There is no roaming in what I’m talking about. This is an agreement with each carrier, so your SIM, or whatever is in your phone, is automatically…
Patrick: But the reason you need it now, Miriam, is that the roaming charges are really expensive.
Leo: Oh, it’s terrible.
Patrick: if you get the roaming charges down to reasonable levels, then you don’t need that feature anymore.
Leo: I thought this was happening this month… So ultimately it’s a slow rollout?
Patrick: Yeah, it’s a slow rollout. Basically I’m not sure, so I’m not going to say anything, but ultimately, you’ll be able to subscribe to any phone service provider from Europe, from any other country in Europe. And that’s a very good example of the industry not being regulated for so long. For a good reason, you know, there is historical reasons for that. But the encumbrance establishing prices, incredibly high prices, wherever they could, and getting away with it because there was no recognition,
Leo: right the only reason I might not agree with you, Miriam, is that Amazon has, historically, not been very good internationally.
Myriam: Amazon would not do the international thing. Amazon would be the spark that would lead to Apple or Google doing this.
Myriam: They would be successful enough that they would be able to say, “We want an integrated vertical experience for our customer that does not involve a carrier anymore.
Leo: You want a crazy Amazon story. They have just patented the idea of shipping items before the customer orders them.
Patrick: I saw that.
Leo: So they have enough data about what you buy on Amazon, that they know that you are likely to buy something. And so what they do is they pre-ship it to the nearest fulfillment center, on the off chance that you do order it. And then we they can get it to you faster you.
Myriam: So you don’t get it before you even ordered it.
Leo: No, no. You don’t get it. Although, that would be very interesting if you did get it ahead of time!
Patrick: There was a funny video about a guy who made the Amazon tomorrow or Amazon yesterday… send you the thing you were going to order on the next day.
Leo: If you read this book… I know I keep plugging this book, but if you read this book it becomes very clear that Besos understands why Amazon’s advantages and disadvantages are. And that disadvantages they have older brick and morter stores so it takes a day to get the product at least. So if they can get the product and get it to you same day… That’s why they’re thinking about drones. That’s not a stretch for them because they really want that product to get into your hand as fast as a brick and mortar store can do it.
Patrick: So how about…Okay, I’m going to use sports metaphor here, and show you how sportsy I am. How about they come out in left field, and announce a TV?
Leo: Ooh. An Amazon TV…
Patrick: A Kindle TV of some kind, because, you know, they’re pushing a lot with the Kindle… I’m sorry the Amazon prime original video content. Honestly, we would have heard about…you know, there would have been leaks, if something like that was going to happen. But maybe…
Leo: Yeah. You know the Boston Globe says, “Oh, it’s just a hiring event.” (laughs) They are not going to announce anything. So we’ll move on. We’ll see, January 30, that’ll be the announcement. We shall see what comes up. Let’s take a break. When we come back, a little bit more will wrap it up. The first massively online Masters Degree program in Computer Science. We could talk about the target mal-ware, the history, you know, this is the big 30th anniversary this week. We’ll talk about that more in just a bit, our guest, the only two people who are not following grid, Patrick and Myriam Joire, where ever she lives.
Myriam: San Francisco, yeah.
Leo: Close enough. That land where, some day, all cell phones will be free!
Myriam: Milk and Honey! It’s called the land of milk and honey for a reason.
Leo: (Laughs) I like it. From the land of milk and honey, Myriam. We’re talking today about Carbonite Online Backup, I tell you if you are, you know, tax time is coming and if you have all your records on your hard drive… Just think about what’s on your hard drive these days! Your whole life is there. If it were to die, would you die? Yeah! Or else if you’re a small business, you might be out of business. Sure, you’re backing up next to you’re computer, but what if there’s a fire, a flood, a tsunami? That could be even worse! Whether you just have one computer at home or several at a small business, Carbonite backs your computer up to the cloud automatically. Continually, whenever you’re online. You can access those files from anywhere, just log onto anycomputer or use their free apps. You can even e-mail those files to one another. Start your free trial right now. Carbonite.com, you don’t need a credit card. And if you decide to buy you get two months free with purchase. It’s as little as $59.99 a year for everything on your MAC or your. PC. They have plans for your big business, small business, external drives. Just visit carbonite.com and pick your plan. You get two free bonus months with purchase, no credit card required to try it for two weeks free. Carbonite Online backup. I thank them so much for their support of, This Week in Tech. Is it a big deal that, now see here Spotify has always been free but globally now it’s free, right Patrick?
Patrick: On the web, it’s always been free to an extent.
Leo: It has been? Oh, ok.
Patrick:But, Yeah, I mean they’re competing with.the big thing there are things like the rise with big services like Ardio.
Leo: Ardio says now, it’s free on the web for all US users. That’s a big thing.
Patrick: Exactly. Yeah, they’ve had to change a lot of things to compete with these view services,
which is probably good for the consumer. I don’t think it’s a huge deal.
Leo: It would be bad for musicians though. There can’t be anybody now, in these businesses.
Leo: I don’t understand how it works. AOL has finally called it quits on Patch. It was a local news services that Tim Armstrong,the CEO,of AOL really buckled down on local news with Patch.
Myriam: You know what’s really sad? I use to work for AOL and I never heard about it.
Leo: You never heard about Patch?!
Leo : That’s a bad sign.
Myriam: That tells you how successful the product was.
Leo: (laughs) That’s amazing!
Patrick: Well the idea wasn’t bad, right? For those that don’t know Patch was basically a series of bloggers creating very local content. It was a way to try to crack…I guess a way of going at the hyper and local information that everyone has been talking about. Unfortunately, it’s not working. I think if we had looked at it a few years ago and had been asked to evaluate it, I think we would have thought it might have worked.
Leo: Yeah. Oh some good ideas in the world.
AOL also selling Win Amp and shout cast. They were going to shut the service down, but along comes the Belgian company, Radiatamy, and they bought it for somewhere between five and ten million and, this might be bad for Radiatamy, AOL took at 12 percent steak in Radiatamy. Well, Radiatamy, I think they are just in Shoutcast because they already are an internet radio play, right? And Shoutcast is great, and there’s a whole directory and everything. I’m really glad they saved that one. WinAmp I don’t care, but I’m really glad they saved Shoutcast.
Myriam: For sure.
Leo: Big, big departure, probably a firing at Yahoo. When Marissa Myer took over she brought over a number two from google, Enrique DeCastro, poached him from google to run their ad sales. Paid him, we believe, even more than she got paid herself $40 million a year or something like that. Oh, no. I guess that was his severance! Yikes! Yikes! “The beginning of a New Year” writes Marissa Myer. “The beginning of 2014, I couldn’t be more proud of what we’ve accomplished. But during my own reflection, I made the difficult decision, that our Chief operating officer, Enrique DeCastro, should leave the company.” She put that in a memo! Usually they just say, he wants to spend more time with his family and we wish him luck.
Patrick: Apparently, there was a lot of people who were waiting for this. Maybe he was not very well liked in the company. I think it might have been an admission that she had to do. She had protected him for a long time.
Patrick: And ultimately she wanted to say Mer Culpa, kind of.
Leo: Yeah, it didn’t work out. He will walk away with somewhere between 88 and 109 million dollars.
Myriam: Not a bad deal!
Leo: According to New York Times he was the eight highest-paid executive in Silican Valley for 1012. Marissa Myer, herself got 36.6 Million dollars. That seems okay. I would take it. But DeCastro got 39 Million Dollars a year. And now he’s going to get the severance.
Myriam: Ah, what’s a million here and there, Leo? Right! It’s the Silican Valley! What do you want? Come on!
Leo: Apparently, it didn’t, it never worked out! It just wasn’t a good relationship. Wow! 39 Million Dollars a year?!
Myriam: I know, it’s crazy, right?
Leo: And then he gets a 40 million severance package!
Myriam: Well, it’s a years worth of Salary, you could go to the Bahamas for the year.
Leo: Right. Bahamas! You could live the rest of your life in Mexico. Have a hacienda. A couple of servants. Or go to… Where was it that John McAfee went? And just hang out there and make bath salts.
Patrick: Bermuda, was it?
Leo: Belize. By the way, McAfee says he's very happy that Intel has dropped the name, McAfee from its antivirus.
Patrick: I think he use a slightly more colorful description. I think he said something like, Has finally liberated me from…
Leo: (laughs) Yes, Basically, he says it’s the worst software in the world. The company is going to call it Intel security. McAfee, says, “I am now, everlastingly grateful to Intel for freeing me from this terrible association with the worst software on the planet.”
Patrick: Oh, ouch!
Leo:( Laughs) He’s not far wrong. There may be worse, I’m not so sure.
Myriam: We need to get John McAfee and John Ledger in one room.
Myriam: It’d be pretty awesome.
Leo: Crazy, and then I guess we’ll wrap it up with this kind of tip of the hat to Sandra Day O’Connor; she saved the VCR on this day 30 years ago. Do you remember? Maybe you don’t you’re probably to young. It was on Friday, that the Betamax case was finally decided. Um the movie companies, motion pictures association took Sony to court. I think it was the current head of the NPAA at the time who said; who told congress that the vcr was to the movie industry like the Boston strangler was to women home alone. They sued; yeah that’s harsh red erect, thank you Jack Valindy, they sued saying, you have to kill video cassette recordings, it’s going to put us out of business. Uh, In 19? Uh what was it? Sandra Day O’Connor was the swing vote at first according to our chivied files. She was this, is the New York Times writing, a client decide with the studios along with their Supreme Court majority, but she grabbed hold of the majority opinion so much so that she wound up defecting in supporting the decent of 5 for decision against the motion picture association in favor of it. The VCR was born and of course as always the case, the motion picture has made billions off of the VCR. Laughing… And then in the hind sight it was the stupidest lawsuit ever.
Myriam: It was all about the Porn.
Leo: Chuckle, says what you say. I don’t know!
Myriam: It’s the different technology and so is this hind sight.
Leo: Laughing… It’s always about the porn isn’t it?
Leo: Hey, thank you for taking the time from your football day.
Leo: Laughing, Myriam Joire is of course that, that.. What are you? Social Media, Marketing? What do you do at pebble.com?
Myriam: I’m the product evangelist official, but let me just mean, I’m head of communications and strategy on the product.
Leo: She’s tnkgrl no vowels on the twitter, tnkgrl and you know what?
Myriam: And, this is my blog.
Leo: Old habits die hard and Myriam still covers the mobile world and the tech world with great verve and intelligence. Tnkgrl.com and you can read all about it. Tnkgrl mobile, thank you, Myriam for being here, I really appreciate it.
Myriam: Thank you for having me, Leo.
Leo: Patrick Beja is at Patrickbeja.com
Patrick: I am
Leo: And notpatrick on the twitter
Leo: Which we don’t quite get, but…
Patrick: Chuckle... Well, Patrick was taken, so you know, pick a word.
Leo: Yeah, but you are Patrick.
Patrick: It’s a little confusing to people, but there is a few not that people like to be called on twitter so…
Leo: Yeah, do you want to plug? What do you want to plug?
Patrick: Um, so I guess there are a couple things. First my French takes me to, because there was a couple people, it was weird this week. A couple of English speaking people that told me that they were brushing up on their French listening to the show. So, since it is a particular subject matter it could be pretty useful so if that’s your case then…
Leo: Is French of “LaHandevuta” perfect French? Is it the kind of French that I should emulate Prussian French?
Patrick: Chuckle... Yes, I got to go with this, “LaHandevuta”
Leo: Laughing… did I say that right? “LaHandavuta.” Exactly what is the word for tech in French?
Myriam: Deep voice… “LaHandevuta”
Leo: Laughing… Tech
Patrick: It’s like that awesome quote, I can’t remember who said it but some American CEO said, “The problem with France is they have no word for entrepreneur.
Patrick: This of course is a French word
Leo: What does entrepreneur mean in France though?
Patrick: Oh the same thing, someone who starts stuff.
Leo: Oh, the same stuff.
Patrick: a startup guy.
Myriam: It involves more mistresses.
Patrick: Laughed. And, the other thing is my brother’s royalty free music shop called, music in cloud.
Leo: Oh Yes!
Patrick: Which is really cool and he’s doing it with his wife, it’s a real mom and pop shop, and it’s … He’s very talented, so you should go check it out, if you have time, and see what royalty free music is.
Leo: What is the address?
Leo: There is no definite article.
Patrick: There is absolutely no definite article.
Leo: It’s by Daniel Beja
Leo: Cool, royalty free music, I like that, broadcasters especially would get use out of that.
Patrick: And its aah, he’s got some pretty cool stuff there.
Leo: Thank you guys and gals, Thank you for being here. Thank you all for joining us, I hope you didn’t get disturbed by our early start; we wanted to get everyone out of here in time to watch a football game, but ah, normally we do Twit Sunday afternoons 3 PM instead of 6 PM eastern time. That would be 2300 UTC on twit.tv if you would like to watch it live. And, we will be up at our regular time next week. Although, I’m thinking, and would love, to get some feedback. Why should we wait an hour between the radio show and Twit? Why shouldn’t we get Twit right under way? Why is that hour even there?
Myriam: For you to brush your teeth.
Leo: Yeah, that’s right, that’s very much a part of my ritual for the day for my show.
Leo: Dental Hygiene is so important.
Patrick: Yeah, as someone who lives in France.
Leo: Earlier is better.
Leo: Yeah, earlier is better. We also make video after the fact available on twit.tv, where currently all bids are created equal at least for the time being. So, if you can’t watch live, you can watch after the fact. Don’t forget TNT all week long 10 AM Pacific, that would be 1 PM Eastern time, 1800 UTC for your daily tech news, and now our new show TN2 our evening version tech news tonight. That’s 4 PM Pacific, 7 PM Eastern time, or plus 12 is 16 plus 8 is 24, so right at midnight UTC. Your last gasp of news! Thanks for joining us and we will see you next time on another Twit, Ok!!