I’m not sure when software developers got such an ego, but I think it’s not very self-serving. If anything it’s harmful. It’s also humorous because it shows just how dangerous being so insulated from reality can be.

One thing I like to do when someone is behaving differently than I would expect them to is to ask myself why. There are really only ever three reasons. I’m assuming, for the sake of argument here, that I am intelligent and that what I expect them to do isn’t just what I want them to do, but rather what I honestly think would be in their own best interest.

Reason #1: They’re stupid.

If they’re stupid, that’s all the explanation you need. Stupid people are basically random number generators. You can predict and manipulate them to some extent, but you really can’t understand them in anything but the most academic sense. They do what is in their perceived best interest, just like anyone else. Their perception is just warped.

This is one of the reasons to which tech pundits often attribute Hollywood not just giving Netflix rights to every movie at whatever price they want. It comes from the ivory tower mentality. It’s easy, when you’re in software, and all of your friends are in software, to assume that you’ve got some sort of monopoly on high IQs.

It is, however, quite simply not true. In the interest of full disclosure, my company, Blue Frog Gaming, has a working relationship with NBC Universal which owns Universal Pictures one of the six major studios. The guys I know work for Syfy, so they’re not really “movie studio execs”. I have met a couple though, and I’ve also talked to a lot of people (even in the tech industry) who have, and there’s one thing I’m sure of, which is that they aren’t stupid. Just like most high-ranking executives in any big business, they’re very smart people.

You just don’t get to high enough up in a multi-billion dollar corporation to make decisions about whether or not to license your content without being pretty smart. The people that most of the pundits are railing against are, quite frankly, smarter than the pundits. They went out and got MBAs from prestigious colleges, and while we can all argue about the value of such, I think we can agree that Harvard and Yale don’t hand them out to stupid people. WordPress isn’t as picky about who they give accounts to.

Reason #2: I Know Something They Don’t.

Ask yourself this, when it comes to digital movie distribution, what do you really know? The tech industry loves to tell them things like “scarcity is a shitty business model” but is it? I mean can you prove that, with numbers, or is that just your hunch? It’s been working for De Beers for over 130 years.

I define anything you “know” to be something you would bet your entire net worth against a cheeseburger for. I’d bet everything I have that 2+2 is 4 if the other side of the wager was Five Guys, because it’s an easy, free, tasty meal. Would you make that same wager about Hollywood seeing an overall increase in revenues by licensing all of their movies to Netflix at whatever trivial rate Netflix must pay them to be able to make a profit by charging $10/ household? If so I’ve got a cheeseburger with your name on it.

It strikes me as quite possible that a world in which some users pirate movies, and others pay $5 or $6 to stream them through their cable companies, and some pay $10-15 a head to see them in a theater might actually be a better one for film companies than one in which some users just pirate and some pay Netflix $10/month.

We in the tech industry, despite a lot of training to the opposite, still manage on almost a daily basis to confuse anecdotes for data. The AVC article I pointed out is a good one. Sure, maybe you just watched some TV and went to bed because the movie you wanted to watch was in theaters and not on demand in your home. But theater goers spend $10+ a pop while a whole family can stream a movie via VOD for $5 or via Netflix for something less than $1. Even for just a couple, scarcity only has to encourage me to go to the theater one time in 5 for Hollywood to break even.

Which leads me to the last and final reason…

Reason #3: They Know Something I Don’t.

The fact that techies are so unable to even consider that this might be the case is really hurting us. We keep telling Hollywood that they’re stupid and they just don’t get it, but they have a lot more data than us.

Things that I don’t know include, but are not limited to:

1. How much Netflix pays movie studios for access to their library.

2. How much VOD pays movie studios.

3. How much they make off of physical media rentals (ie. video rental stores, Redbox, Netflix’s mail service, etc.)

4. How much people would pay for a streaming Netflix-like service that actually has good movie selection. Let’s say every new release. (And whether or not they’re quietly building such a thing as we speak.)

5. How many people would subscribe at what price point.

6. How much piracy is really hurting them (ie. how many people who pirated a movie would have paid for it in some way). I suspect they overestimate this, but I also suspect tech pundits underestimate.

7. Why people think Betty White is so funny. She just says unfunny stuff and people laugh because they’re old. Not relevant to this post in any way, but seriously. She’s like a modern-day Robin Williams, except she isn’t even motivated enough to come up with silly voices.

Numbers 1 through 3 alone are necessary to make an informed decision about whether building a Netflix-like digital distribution system would lead to an increase in revenues. I doubt anyone knows the answer on 4, 5, and 6, but I’d be willing to bet they’re somewhere between what tech pundits and the RIAA claim.

The question I’m forced to ask myself though, is whether or there there could exist a set of numbers for 1-6 that make the industry’s current tactic (maintain the status quo while throwing legal dollars at fighting piracy) more profitable than licensing all of their content to Netflix? It seems at least quite possible, when you consider that the price of a movie ticket has to be at least 20x what they get from a Netflix view.

As I said before, Hollywood execs aren’t stupid, and they have a multi-billion dollar industry to protect, so they probably aren’t lazy either. I’d bet they’ve done their homework. My feeling is that Hollywood very much has these variables in mind. They know the answers to the first three questions and all of the tech pundits railing about how they “just don’t get it” don’t. I’d be willing to bet they’ve done market research on the next three, though I don’t feel like anyone can truly know 4-6 until someone builds such a thing. As for Betty White, I guess we’ll never know.

So rather than excoriating them for being dumb or out of touch, perhaps there is a way to build a service that alleviates their concerns. Given that Netflix costs $10/household, while movies are $10-$15 per person and VOD $5-$6, it’s not surprising that Hollywood is reluctant to cannibalize itself.

This is one of the few bad things about bi-partisanship. When something like the need to stop piracy is widely accepted by both parties (SOPA had broad support on both sides of the aisle) and there is campaign funding at stake, they can turn a lobbyist’s email into a law faster than you can blink.

What we in the tech industry really need to fix is lobbying, and to do that we must first fix our worldview. We subscribe to the romantic notion of a meritocratic market.  We shouldn’t. It’s an ideal, but we don’t live in a world of ideals. We live in a world in which politicians make the rules of the game.

Paul Graham, in Y Combinator’s latest request for startup, says of Hollywood:

SOPA brought it to our attention that Hollywood is dying. They must be dying if they’re resorting to such tactics. If movies and TV were growing rapidly, that growth would take up all their attention. When a striker is fouled in the penalty area, he doesn’t stop as long as he still has control of the ball; it’s only when he’s beaten that he turns to appeal to the ref.

This way of looking at it is why SOPA existed in the first place. To mature industries like Hollywood lobbying isn’t an area of focus, it’s a basic business function. This is equivalent to saying “Google must be dying because they have accountants. If they were good at making money they wouldn’t stop to count it.”

Mature industries have lobbyists just like they do janitors, it’s simply something they view as a cost of doing business. I believe the software companies will get there soon.

But fixing the problem (which I’m not optimistic about) is another thing entirely, and no one industry can do this. The root cause is our system of campaign financing. Congressmen accept money from industries because they believe (probably falsely) that money helps keep them in office.

I’ll avoid getting political here because I could rant about campaign finance reform for pages, but the upshot for the tech industry is they need to either fix the game, by lobbying to end lobbying, or learn to play it better by lobbying to uphold their rights. Either way it shouldn’t (and I think in the very near future won’t) be viewed as anything other than a basic business function.

“Argue that it was written word-for-word by lobbyists and endorsed by the politicians they pay.”

While entertainment and drug companies are certainly pushing hard for this bill to go through, you can bet anything that tech giants like Google and Facebook are lobbying right back at them from the other end, for the obvious monetary reasons. You think those companies are any less seedy and willing to pay off a politician or two?

The fact is that SOPA was introduced to prevent crime. The only legitimate argument against it (which is why I don’t support the bill) is that it will fail spectacularly in preventing what it is intended to do. But I think the intentions of the bill are good and if there was some way to alter it to make it more effective I would support it.

I wouldn’t argue that tech companies are morally superior to drug or media ones for sure. But I would definitely argue that we’ve seen time and again that they are very, very poor at playing the political game.

I think that’s largely due to youth. There haven’t been companies making large amounts of money from the internet for very long. They partially just haven’t figured it out yet. The movie studios have had a century to learn how to abuse our political system. Give Google and Facebook some time.

It’s also due to an undeserved notion of meritocracy. The best service should win, we all feel, not the one best at playing the game.

I think we’ll see a stronger, concerted lobbying arm for Silicon Valley in the not too distant future. That should at least keep ridiculous bills like SOPA from ever becoming a threat.

O’Reilly makes two points, both of which are simply wrong. The first is…

“Piracy is not a significant problem… Once the market matures, the pirates go away. They always do. Legitimate markets work better than pirate markets.”

This is a common fallacy I see over and over. “The movie companies fought VHS,” you’ll hear, “and it ended up being an enormous source of wealth for them.” True. But that doesn’t mean digital content distribution will.

There’s a standard disclaimer in every mutual fund prospectus that says “past performance is not indicative of future results”. It’s entirely possible (and in fact I believe it to be true) that digital distribution is such a fundamental shift in the nature of piracy that you can’t assume it will simply all pan out OK the way it always has in the past.

In the VHS days to pirate a movie I had to have someone who had two VCRs rent a movie, buy a blank VHS tape, and spend 2 hours copying it for me. The barrier to getting that done is not insubstantial when you consider that every single instance of piracy requires that. It’s not scalable.

Via digital distribution I just have to have someone not delete the torrent. It’s effortlessly scalable to millions of people. It’s not significantly less work to pirate it for anyone involved than it is to purchase it legally, and it is significantly less cost.

Sure, if you’re making books that teach people programming languages, they might be willing to pay. I think its fair to say that the music industry’s results have shown that it just doesn’t work the same way for music.

The second is the notion that SOPA/PIPA will somehow be bad for US-based startups. That would seem to be the case if you didn’t actually read them. The laws clearly apply only to foreign companies. If anything, it will be an unfair advantage for startups here. Rhapsody can perhaps simply get Spotify shut down for infringement (remember, there’s no burden of proof).

O’Reilly says that “If SOPA goes through, it could very well force certain innovative companies to go offshore.” I think the exact opposite is true. Foreign companies will come here to be protected by the DMCA.

And the worst argument of all (and O’Reilly didn’t pull this card) is the slippery slope. This is one of the most insidious logical fallacies around, because at least ad hominems don’t even attempt to masquerade as rational thought. This is the same as saying “if we allow gay people to marry pretty soon it’ll be legal to marry your dog”. It’s been used since time immemorial to argue against every single advance in civil liberties.

A government can’t simply not pass a law just because future laws might overreach. We didn’t need to slide down any slopes to get the PATRIOT Act, and whether or not SOPA passes will have no bearing whatsoever on censorship of legitimate free speech in the future.

So there you have it. If you want to argue against SOPA, there are plenty of good reasons. For one, it won’t stop digital piracy at all. I think it will severely curtail illegal sales of counterfeit goods and prescription medicines, but getting illegal music will just involve editing your hosts file or, more likely, getting a program that does it for you. 

Argue that the lack of any burden of proof makes it absurd in any scenario. Argue that it’s a violation of trade treaties, since it’s clearly showing preferential treatment to U.S.-based businesses. Argue that it was written word-for-word by lobbyists and endorsed by the politicians they pay.

There are so many reasons to dislike these acts that we don’t need to make up more.

This will be particularly disastrous for mobile networks because, since they operate via radio waves, it requires a potential upstart to acquire large amounts of spectrum to compete, and in this day in age there isn’t much left to go around. It would be ok to let automobile manufacturers merge down to two because there are always foreign ones to compete with, and anyone with a decent chunk of capital can start their own. (See Tesla). But there’s a very real limit on how much spectrum can be used for mobile devices and we’re pretty much at it. There’s going to come a point, in fact we might actually be there, where you simply can’t start a carrier for any amount of money.

Also the FTC could not possibly approve any other mergers in the space. This particular one will leave three national networks, and the FTC will never let a market that previously had a half dozen competitors consolidate all the way down to two. If this merger goes through, AT&T will have about 1.5x the users and spectrum Verizon does, and Verizon will have no way to catch up.

And what happens if Sprint Nextel fails? They’re having some serious troubles, and while I’m a fan of their service and optimistic that they can turn it around, if they don’t we’re once again stuck with a duopoly. At least then Verizon could possibly pick up their spectrum, but still, that’s not good.

Spectrum is the new gold rush. I’m concerned that if this merger goes through the effects will be both disastrous and irreversible.

Tablets need to do a few things to compete with the iPad, I’ll list them here in approximate order.

1. Compete on price. Nobody’s going to buy your Xoom for $800 when they can buy an iPad for $500. The lowest end iPad would seem to be the vast majority of sales. For a long time there when iPads were scarce, you could pretty easily pick one up by stepping up to the $600 level, but a $500 required waiting for weeks. Most people waited.

This makes sense. The whole reason one of these devices work is that everything is in the cloud. Your email is web based. Your video is coming from Netflix. Even your music is going to move into the cloud soon if it hasn’t already. What’s a few gigabytes at that point?

If your device is going to be priced higher than the iPad, there better be a damn good reason. Give me an AMOLED screen for example. (I think we’ll see this in the sequel to the Galaxy Tab, and it will be awesome.)

2. Think more along the lines of a notebook than an oversized iPod. This, I think, is one of Apple’s mistakes, both with the iPad and the iPhone/iPod Touch. They still make me tether my iPad to my PC. Why?  Developers have seen, as a result, that iDevices are often running on older OSes because people don’t want to do that.

And why should they? It’s ridiculous. There’s no reason this device can’t be updated over the air. There’s no reason it can’t sync music over Wi-Fi. With a Bluetooth Keyboard and Mouse this device could be as independent and functional as any notebook. It’s Android competitors will be.

3. Better licensing terms to foster app development. While I’m not in the camp that thinks Apple’s app store policies are unethical or abusive, I am almost certain they’re a strategic mistake. Tablets are a glorified thin client and are largely meaningless without cloud services. When it comes to cloud services, subscription revenues are king.

Forcing good e-reader apps like Amazon’s Kindle, or good video apps (Netflix) off of your device in an attempt to get 30% of revenues from them is a mistake. Those kinds of apps are why the device exists. They don’t have high enough margins to eat 30%. It would have been better to enforce this policy from the beginning so that we wouldn’t have come to love those things only to have them yanked away.

4. Support Flash. This is a no brainer. The lack of Flash is constantly a pain on the iDevices, and none more so than the iPad. Want to look at the website of any high end restaurant? Nope! Watch Hulu? Nope! (That’s partially due to Hulu being a pain in the ass, though you can get around that on Android with some browser string hackery). Play Cityville? Nope.

The lack of Flash is a true annoyance on the iPad. It won’t be on Android devices.

5. USB ports. There’s no reason current accessories can’t be just a driver away from working with tablets. It’s understandable why Apple forces accessory makers to use their certified connector, but for third parties the ability to connect mice, keyboards, printers, cameras, etc. might be enticing. I know I’d love to be able to charge my phone from my iPad.

6. Don’t roll your own OS. We’re in the early 1990’s all over again here, and Apple’s simply repeating their mistakes from the PC market. If you want to compete, just do exactly what the PC makers did. License a good third party operating system (right now that means Android, though I expect there will be a competitor soon, but more on that in another post) that developers are supporting, that is going to give you a software lead which in turn will give you a sales lead.

Though I love WebOS (I’d rate it a 9, iOS a 7.5, and Android a 6 and I’m the only person I know who has used all 3 extensively) I think HP is making a big mistake. They’ve got a chicken and egg problem with their app market. Their hardware is too far behind the times (by the time the WebOS tablet launches the iPad 2 and who knows what Android tablets will be on the market) and they probably don’t have a good enough strategy or big enough ad budget to solve it. The same is true of RIM’s Playbook. 

I think we’re seeing only the beginning of the tablet market right now. We are where smart phones were 4 years ago and the space is really going to heat up. Competitors have the chance to do the same thing to Apple that PC makers did two decades ago.

First, some people said “that isn’t interesting, science fiction writers have been talking about this for decades.” Maybe they have. The closest thing to my vision that I’ve seen is Minority Report. I remember a scene with cars zipping by at incredible speeds. I think they were levitated though. I haven’t seen anything that resembles what appears to be the near future.

It may have been written about, in fact it probably has many times, but like 99.9% of the population I haven’t read it. I’d be happy to if someone has a good recommendation. Though I’m always optimistic about the genre I find most sci-fi to be poorly written crap. Like most niche genres (fantasy, western, romance, etc.) the fact that it caters to a pre-disposed segment of the population (in this case, people who like to think about science and technology, of which I am one) means the writing has to be much less good to achieve a level of success.

In my list of benefits of driverless cars, I compacted the timeline greatly. I see the transition occurring in the following three stages.

Stage 1: All cars on the roads have drivers.

Stage 2: Some cars have drivers, some don’t.

Stage 3: All cars on roads are driverless.

The line between stages 1 and 2 will be very blurry, but it will be drawn in the history books somewhere around now. (Humorously, many people said “cars can’t drive around on the streets by themselves yet,” apparently oblivious to the fact that Google’s cars already are.) As some commenters mentioned, we’re moving increasingly in that direction now. Dynamic Cruise Control matches the speed of your car to that of the car ahead of you. Cars can parallel park themselves. They can hit the breaks to prevent you from getting in an accident when the driver ahead of you stops abruptly, and they can warn you when you’re coming out of your lane. These aren’t the techs in labs either; they’re in models you can currently buy, many of which aren’t very expensive.

The line between stages 2 and 3 will simply be government regulation. Stage 2 will last for years, and maybe even a few decades, and then it will end when the government says “within 10 years all cars on public roads must be driverless”. The real shame is that there’s no politically and technologically feasible way to skip a protracted Stage 2. All the best stuff (like the highly increased average speed) will have to wait until Stage 3, and to be honest Stage 2 is far harder of a technological problem. If we were able to start from the ground up, designing both our system of roads and our automobiles we could easily have driverless cars now.

A lot of people pointed out that government regulation will inhibit Stage 2. I’m not so sure. For one, it’s clearly legal now or Google wouldn’t be doing it. I can’t imagine they’d be dumb enough to have cars driving themselves around the streets of San Francisco without asking their legal team what the risks were in advance.

Also, this technology must be in the late stages. Google doesn’t want the PR nightmare that would ensue if one of their cars hit a pedestrian or t-boned some old lady at an intersection. If Google has these cars out there logging hundreds of thousands of miles, you can be sure they’re pretty damn safe.

And really, why wouldn’t they be? We’ve had driving simulations for decades. Once the car’s sensors do a good enough job of modeling the reality around them, the rest is nothing more than a video game. If an AI can race competitively in the latest Gran Turismo why can’t it drive around New York? Is it really that hard to detect other cars, pedestrians, stop signs, traffic lights, etc?

There’s a strong chance that by the time regulation even addresses this issue it will be solved. The NTSA won’t have to guess about safety, they’ll have hard data. My guess is it wouldn’t be hard for computers to do a better job driving our cars than we do. It turns out we’re pretty awful at it, and the proliferation of smart phones is making us materially worse. Texting and driving is believed by many to be both more dangerous and more common than driving drunk.

Some people said we’ll see full automation in airlines first, for regulatory reasons. I don’t believe it. People are decidedly and predictably irrational when it comes to air travel. Certainly we could have this technology there, but one airline crashing would cause a groundswell of opposition that you’d need 10,000 cars crashing to accomplish.

Take 9/11 for instance. After the planes hit the towers, air travel decreased markedly, and miles driven shot up. More people died as a result of the extra driving due to the terrorist attack than on the planes during it (at least according to one researcher). People fear flying in a way that is psychologically understandable but statistically irrational.

On the opposite end of the coin, people hate driving. In fact a long commute actually makes you more unhappy than a bad marriage. A number of people like driving and there will certainly be racetracks for them, but I think most would agree that the benefits of complete automation vastly outweigh the hobby of a minority.

A lot of people didn’t like my thought that urbanization will reverse. I’m using “urbanization” to mean specifically living in cities and not suburbs. People will mention that urbanization has increased, but in America that is only because suburbs are typically counted. In fact in the industrialized world people have been leaving cities for surrounding areas for decades. Now in the US, the population in the suburbs of the 20 major cities exceeds that of the population in those cities. I did not mean to suggest we’d all go back to an agrarian society, I simply see the world trending toward one giant suburb.

People gave a number of reasons why urbanization would continue instead, but almost all of them are based upon notions of proximity that become antiquated in a Stage 3 world. Proponents of urbanization pointed out that population density leads to variety. This is true now, but that’s an artifact of geography. The real benefit to density is proximity (almost every other characteristic is negative) and the only benefit to proximity is travel time. That travel doesn’t have to be by car, and perhaps even despite cars being effortless and flawless in terms of safety some people will still want to walk for health reasons. (Humorously enough, not having to drive will, I think, lead to people having something like an exercise bike in their car to work out on while travelling.)

Take restaurants for instance. An Ethiopian restaurant can be found in any big city like New York or Chicago. Good luck finding one in a small city like Akron, where I live. The reason is entirely travel times. When choosing a restaurant, the time required to get there is a deal-breaker. I may be in the mood for tapas, but I’m not ever going to drive two hours to eat it. I’d have to be really in the mood (and the restaurant really good) to even drive half an hour.

This puts a practical limit on the restaurant’s customer base. To start an Ethiopian restaurant, you need to have enough people who like Ethiopian food (or will try it and then come to like it) who can get there within some amount of time, let’s say 20 minutes. In a densely populated city like New York or Chicago that exists. In a sparsely populated one like Akron that doesn’t. Triple the speed at which everyone drives, and you’ve now tripled the geographic customer pool. People could spread out to 1/3 of the current population density and still have the same amount of variety they do now. Akron, it its current density, might just support one then.

There are almost no benefits of city life that aren’t solely based on travel time and thus eradicated by much faster transportation. Proximity isn’t and end in and of itself. It’s a means to one, which is low travel time. I derive no benefit from having my friends being within 3 miles of me. I derive benefit from being able to go to their house, or meet them at a restaurant, quickly and easily. A friend or restaurant 9 miles away in a Stage 3 world is the same as one 3 miles away now in Stage 1.

Either way I’m excited by the thought that I may live to see a Stage 3 world. That is, of course, assuming I don’t get hit by a bus driven by a human beforehand.

My thinking might have been wrong though because Google isn’t a search company. Right now they’re a product development company (and generally a poor one) funded by search. In the future, though, they’re going to transition to an artificial intelligence company. They’re already halfway there. Search is just the problem they first applied AI to, and the one they’ve grown to dominate. In the future they will have much bigger fish to fry. While Facebook is still trying to figure how to make money off of people sharing pictures, Google may be revolutionizing one industry after another by pushing the bounds of what software can do.

Take the automotive industry. That’s nearly two orders of magnitude larger than search. To put that another way, if Google managed to scoop up just 2% of that industry they’d have more than doubled their revenue. With their driverless car project, I think they’ve got a shot of taking a much bigger slice of the pie than that.

Imagine a world in which all cars drove themselves. Seriously think about the ramifications. Here are just a few:

1. Cars may be cheaper and/or higher markup. Mechanical drivers will eventually reach a point where errors are no longer a common occurrence, and as a result, safety regulations (which currently add significant expense to cars) could be greatly relaxed. The conversion to electric cars (which will have to occur, as fossil fuels won’t be able to accommodate the meteoric rise in drive time) will also eliminate expensive exhaust systems.

2. Children could own cars. Don’t feel like schlepping your kid to soccer practice? Just buy them a car. Age restrictions on driving only exist because children can’t be trusted not to kill themselves or others on the road. If a machine is driving for them that’s no longer an issue. Parental controls will easily alleviate other concerns.

3. The beverage industry will grow. Designated drivers are a thing of the past. Go to the bar, get wasted, have your car take you home. Hell, get a rum and Coke to go on your way out the door. How many times have you had a beer or two less than you wanted to because you knew you had to drive home? Never again.

4. Speed limits will be unnecessary. A mechanical driver processes information so close to instantaneously that mechanical limits will be the only factor restricting speed. Cars that can travel at 200 mph will become common and fetch premiums.

5. Traffic, too, will become a thing of the past. Slowdowns are caused entirely by human error. Accidents, people stopping abruptly, merging poorly, etc. Intelligent routing and better driving will mean that you’ll maintain top speed throughout your trips.

6. The map will shrink greatly. Right now I live about 30 miles from my office and the commute is on the very edge of what I can stand. Make my car driverless (freeing me up to watch TV, read a book, catch up on emails, etc.) and able to travel at twice the speed, and spend the entire trip at top speed (rather than slowing down and speeding up on the highway) and I could feasibly live as far as 100 mph away. Since the area of a circle is proportionate to the square of the radius my possible housing locations just grew by about 11x.

7. Urbanization will reverse. Why pay $3,000/month for a flat in Manhattan when you can get from 100 miles upstate to work in 30 minutes? That’s enough time to watch The Daily Show on the way in anyway.

8. Airlines will be devastated. Why fly from New York to Chicago? Just hop in the car, watch a couple movies (on the screen that is mounted where Wikipedia says that something called a “steering wheel” used to be) and you’re there.

9. Other forms of public transport won’t fare much better. A driverless cab won’t cost much more than a bus (which also will be driverless) but will be a hell of a lot nicer. Don’t even get me started on subways.

I could go on but you get the point. Whoever invents the driverless car is going to make a lot of money. Possibly more than anyone has ever made before by an order of magnitude. This could be Google. I’m not saying it will be them. There’s far too much standing in between us and the driverless future to predict something like that accurately, especially since many of the obstacles are governmental. But it does seem as if it almost has to happen eventually, and right now they’re probably the frontrunner.

And that’s just one industry. Imagine customer service. A program that could do as good of a job as a real call center rep could simultaneously decrease costs and improve service. It would replace millions of employees nearly overnight. How much could that make? There’s almost no industry that can’t be greatly improved by AI.

So while as a search or mediocre product development company GOOG is starting to like more like a blue chip, I think as an AI company, Google has a shot of generating massive growth.

The complaint of the EFF-types is largely that wireless broadband carriers are exempt from the Unreasonable Discrimination clause, which states that:

A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not unreasonably discriminate in transmitting lawful network traffic over a consumer’s broadband Internet access service. Reasonable network management shall not constitute unreasonable discrimination.

What this means is that Comcast cannot charge you for watching Netflix streaming, even though it competes with their Hulu service, or accept payments from Yahoo to make Google searches really slow. Wireless carriers, however, can do this if they choose.

I’m quite alright with this. The government has long regulated natural monopolies, and it’s a system that, while not perfect, works pretty well. Wired broadband is functionally a natural monopoly, or perhaps more accurately a natural duopoly since both telephone and cable lines have been repurposed to provide broadband data.

Wireless broadband, like wireless phone service, is far from a natural monopoly. There are four major carriers in the U.S., and scores of regionals and MVNOs, all competing on margins. There are also data only wireless services like Clearwire and Aircell and a few satellite providers. Prices have been steadily decreasing (though services have increased). I now pay less for boundless minutes, unlimited text and 4g data than I paid for far fewer minutes, pre-3g data, and 100 SMSes a month a few years back on the same carrier. I used to suffer from overage fees regularly, now with the free mobile to mobile, earlier nights and weekends, and unlimited SMSing I don’t even come within 500 minutes of my cap.

Wireless broadband doesn’t need to be regulated because the market will take care of it. As long as the government doesn’t allow any further M&A in the space, which I don’t think they will, we can let the free market act. If Verizon starts slowing down Google searches, I’ll switch to Sprint, who I’m fairly certain never will. The first rule of the FCC’s regulation, transparency, does not exempt wireless carriers from being forced to disclose this sort of behavior and that’s enough.

What I think we’ll see, instead, is usage caps. The networks are strained not by average people, but by those (unfortunately myself included) who use the internet as a replacement for everything. Those of us who get our TV shows and movies streamed from Netflix or downloaded via BitTorrent, purchase (or obtain by other means) our music online, etc. are going to have to pay extra for the privilege. But thanks to the Net Neutrality regulations we won’t have a situation in which ISPs exert undue influence on whether you shop at Amazon or Buy.com, or search via Google or Yahoo.

Facebook has struggled with justifying astronomical valuations for years now since they had loads of traffic and little to no monetization. Even now they’ve got traffic comparable to Google, but make in a year in revenue about what Yahoo makes in a month, and their expenses are probably higher per customer.

So to justify the valuations the investors wanted on further rounds Facebook had to rebrand themselves as not just a site where people go to talk to high school friends (because Classmates.com already proved nobody wants to pay for that) but as a utility. Introducing "the social graph". This nebulous term is designed for no purpose other than to make people think Facebook holds some sort of key to making money and all they need is a little time. If you accept the premise that there is such a thing as “the social graph” and that it’s useful to big businesses, then Facebook of course is the next Google and who wouldn’t invest at a $15 billion valuation?

So now Twitter wants in on that action. They’re not just a place where people go to read inane SMSes from Lady Gaga and Justin Bieber, they’re a utility. They hold the “interest graph”.

Next up Zynga is going to claim that Farmville gives them control of the “virtual agriculture graph.” Oh wait, Zynga just makes boatloads of money so they don’t need to make up stupid terms to justify their IPO.