Investors on the whole view incumbent telcos in mature markets as reliable sources of cash, like utility businesses.

………..

So as, say, a pension fund portfolio manager, you have a company with a reliable dividend yield higher than some of the yields on offer in the “high yield” bond space at the moment, theoretically with lower risk, so why wouldn’t you want to own it? And why would you encourage the management to do something which might put that at risk, particularly if you have limited confidence in them to actually execute it? So you urge them to just keep doing what they do, better, with fewer people, and to hand over any excess cash to you, because you can invest it more efficiently than they can.

It sent me down memory lane. At one point in my career I had the opportunity to see the (financial and operational) inside of a very succefull division of a larger conglomerate. Very succesfull? Replace that with a cashcow even beating cable companies in terms of EBITDA. (EBITDA is an acronym for in laymens words “all the cash generated by a company after subtracting all the bills and wages that have to be paid”). Cable companies like Comcast  and Ziggo report EBITDA percentages of more than 50 % of their revenue, this company generated more cash per Euro of sales.

Yet the CFO of the division complained bitterly. In his view the high cashflow was an addictive and deadly drug. First of all it was a sign that the management of the company did not see any good investment opportunity which would generate the future cashcow: he saw it as a sign of near certain decline of this particular business  in the future. He told me that this great “tree” of a business made it nearly impossible for any innovative idea to get enough attention, energy and stamina to survive the rocky early stages. The innovators who fought with tooth and nail to get this business going were enjoying their pension, the current management was a different breed (sic!). Any new  idea was judged against the success of the main business and was expected to become almost as successful.

Secondly on corporate level (where management was rotating every half a decade) the joy of having a great cashcow had been replaced by an expectation, already communicated in future plans and investor relations. Our CFO complained about laziness and the tendency to embark on Great Adventures with  high riscs “because you had this great cushion to hide your mistakes, or worse borrow excessive amounts of money with this collateral”.

No business is the same, but the observation that too much of good thing (EBITDA) can be lethal stands.

The best idea I heard are that we need to get these two fundamental rights in our constitution, which cannot be negated by a civil contract, an unreadable EULA or the like.

First of all the right that all data about you remain your possession, no matter who has collected and stored them.
Which means that you can access, modify and reclaim them (ofcourse within reasonable limits).

The second right is to be forgotten. That data about you cannot be stored indefinitely, wil fade away over time.
Happines is a good health and a selective memory, a unlimited memory is a burden.

I like this, like this a lot. It would create a counterforce against the Facebooks and Hyves of this world.
Great dinner…..

via boingboing.net

“Considering the exclusive right to invention as given not of natural right, but for the benefit of society, I know well the difficulty of drawing a line between the things which are worth to the public the embarrassment of an exclusive patent, and those which are not.”

• First, the stuff we cover with intellectual property rights has certain vital differences from the stuff we cover with tangible property rights. Partly because of those differences, Jefferson, like most of his successors in the United States, does not see intellectual property as a claim of natural right based on expended labor. Instead it is a temporary state-created monopoly given to encourage further innovation.

• Second, there is no “entitlement” to have an intellectual property right. Such rights may or may not be given as a matter of social “will and convenience” without “claim or complaint from any body.”

• Third, intellectual property rights are not and should not be permanent; in fact they should be tightly limited in time and should not last a day longer than necessary to encourage the innovation in the first place.

• Fourth, a linked point, they have considerable monopolistic dangers–they may well produce more “embarrassment than advantage.” In fact, since intellectual property rights potentially restrain the benevolent tendency of “ideas . . . [to] freely spread from one to another over the globe, for the moral and mutual instruction of man,” they may in some cases actually hinder rather than encourage innovation.

• Fifth, deciding whether to have an intellectual property system is only the first choice in a long series.¹³ Even if one believes that intellectual property is a good idea, which I firmly do, one will still have the hard job of saying which types of innovation or information are “worth to the public the embarrassment” of an exclusive right, and of drawing the limits of that right.

Thomas Macaulay repeated this position in England 30 years later:

“It is good that authors should be remunerated; and the least exceptionable way of remunerating them is by a monopoly. Yet monopoly is an evil. For the sake of the good we must submit to the evil; but the evil ought not to last a day longer than is necessary for the purpose of securing the good.”

I wonder if any politician who is discussing copyright extensions to 99 years or “three strikes you are out” proposals has ever bothered to read what great minds have thought and said…

That is the reduction in our GDP according to the statistics in Q1 2009. People who rely on extrapolation see doom and gloom, others think the bottom is near.