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Public Policy

Gaming FON - Will the business model work?

So, I've written in the past about how I think that the FON Crowdsourcing business model is pretty brilliant. And the relatively simple system of Bills, Linuses, and Aliens.

Profitability Numbers

Recently celebrated 1000 passes sold and I've also read that he believes they will be profitable if they make $1/router/month. At 80,000+ routers that's not a bad wad of cash for a shoelace company. Also, everyone is talking about the partnership with Skype as a way for Skype users to have wifi mobile phones. That's an interesting idea, but my money is that their partnership with Skype is also about using FON routers as super nodes (see Robert Cringely's article on the problems with Skype super nodes). Also, Google funded FON without much clear synergy for Google. At the time it started hiring and funding Mozilla Firefox referrals, people took a little while to understand that beyond just "being nice" this secured Google as default search engine in Firefox and that default search engine is easily worth far more than a $1/referral for the search engine ad revenue.

So, beyond the partnerships bringing in money FON is relying on two sources of revenue: Aliens and roaming Bills

How the Digerati Can Game the FON Model

Now, I haven't tried this yet, but here's where I see the way to "game" the FON model. Basically, if you are like the majority of the FON users you live in a place where you are unlikely to get many Aliens visiting your house. So, there is little to no motivation for you to be a Bill. Given that, you sign up as a Linus so that you can roam for free. Now, if you eventually do have a place where you might make some money from Aliens then you register as a Bill. You make money from this location and yet still roam for free. While this is a bit of a weakness of the business model, the reality is that there aren't that many people who will take advantage of it.

People Involved: 

Game Theory - Repeated Prisoner's Dilemma with Unknown Number of Rounds

I went to a "smart athletic people's conference" and we played some games. Of course, the "smart" side of it meant that some of the games should be "heady" games. So, I included a game theory game:

Game 1 - Pricing Game:

You sell beer. You have one competitor who also sells beer. Each day you and your competitor have two choices for your price that day: a high price or a low price. There are four possible outcomes:


The numbers represent the profit you make that day in the order of (Your Profit, Competitor Profit). So, if you both choose "low" then the result is "1,1" meaning you each get 1. If you choose low and the competitor chooses high then you will get 3 and he will get 0.

Note that the game is symmetrical: "you" and "competitor" can be flipped and the results are the same.

How we will play the game:

Everyone will get two small cards - one that says "high" and one that says "low". We will play until this program tells us to "quit":

import random
limit = 0
loop = 1
while loop == 1:
again = random.randint(0,100)
if again > limit:
print "play again"
limit +=1
loop = input("time for next round? 1 or 0: ")
print "%d rounds, quit now!" % (limit)
loop = 0

I ran this program several times and got results between 3 and 27 rounds. It could theoretically go about 100 rounds, but that's pretty unlikely.

Your score: the sum of the results from each round. For example, if you and your competitor both chose low every time and the game lasted 3 rounds your scores would both be 3.

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Bias from Sources of Funding

Wired is running an article about funding and bias in global warming science this morning. Global warming is a topic that is pretty popular right now, but I believe they are only really telling half the story on the funding/bias issue.

The slant of the story is that Pat Michaels, a long time anti-human-induced/global-warming-is-exaggerated scientist is being biased in his research because he is accepting money from energy producers. Certainly, many research companies have gotten into scandals in recent years as they write passionate stories on a subject only to have it revealed that the study was funded by the organization that stands to benefit the most. This is especially sad when the actions of the research organization are in opposition to the findings in these studies.

So, if we accept the claim that research funding from "interested" parties biases the researchers then what can we say about the people who are crying foul in the case of Michaels?

A quick quote from the article:

"These people are just spitting into the wind," said John Holdren, president of the American Association for the Advancement of Science. "The fact is that the drumbeat of science and people's perspectives are in line that the climate is changing."

Frank O'Donnell, president of Clean Air Watch, a Washington advocacy group, said: "This is a classic case of industry buying science to back up its anti-environmental agenda."

So, who are the people funding these organizations. Neither of them readily discloses their sources of funding (at least not that I could find in a cursory view of their website). Clean Air Watch (CAW) does accept donations from private individuals - in which case you have to ask a question: "what motivates a private individual to give money to CAW?" The optimistic perspective is that people do it because CAW is doing something to help every person who breathes air. The pessimistic perspective is that if CAW produces enough "alarmist" reports that scare people into action then those people will be motivated to give more money to CAW. I think it's only fair to say that both the optimistic and pessimistic perspective are valid in at least some of the cases which brings me to my point: CAW has a bias in it's source of funding! So all of this "CAW is holier than though, Pat Michaels" stuff is poppycock.

People Involved: 

Fear and Politics in the US

So, I was reading Businessweek the other day (again) and an interview with Soros (subscription required) struck me a little bit odd and misleading.

But a little background first...

Management and Decision Making Styles

One of the first things I remember from my management class was a graph that looked somewhat like this:

Management Styles

Of course it was fancier and what not, but that's the basic idea. If you are in a situation where there is a relatively small amount of time pressure, you can take a little while to make the decision and the structure for the decision making (the management) tends to be relatively democratic. If you are under a deadline and are doing something "serious" or "scary" then there isn't enough time to consider a very broad set of inputs and the decision tends to be more autocratic.

The lesson also discussed how you can flip the situation - or the perception of the situation - to use a different management style. So, if a person or an organization needs to be more autocratic to get an organization to move quickly or do something that isn't very popular then you can emphasize a relatively scary, serious, and time-sensitive item in the world which will give management more power and allow them to make decisions on their own. The employees will respond to this reasonably well for at least a little while because that's what employees do in times of crisis.

Use and Abuse of Crises - Both Invented and Real

So, if you can use an invented crisis to move people to action and make positive change happen then that's a pretty awesome thing. If you disagree with the course of action then you will tend to see this as an abuse of power. There are several examples from U.S.A. politics that show this method in use - whether for good or bad:

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Denver Residential Block Beautification Program

The Denver Residential Block Beautification Program is a grant system for public area improvements within certain neighborhoods.

Eligibility Areas

The program is available to residential blocks with 51 percent or more of the residents are low or moderate income based upon census block group data. The actual monetary threshold is not stated in the informational brochure that I have. The neighborhoods that are eligible coincide with neighborhoods I recognize from Piton foundation maps that have recently had ~25% of residents under the poverty line. So, it's basically a way for poor people in poor neighborhoods to get some grant money to improve the public lands on their street. Examples of the public land are the curbs, sidewalks, and the "street lawn" which is the area of plantings that is between the curb and the sidewalk.

Eligible projects

Eligible projects include a variety of things such as sidewalk replacement where there are cracks, curb cuts to make sidewalks more wheelchair and stroller accessible, and to either install or remove trees from the street lawn.

You can also get the city to install sod in your street lawn. You can not get the city to install other plants in the street lawn.

This is the "Denver" residential program, but the use of the word "Denver" in the title is about the end of the regional personalization that was given to this program. Denver is a dessert. Sod is not a good idea. If you go to the Denver Water site you can see that the major issue for them is water conservation. They have articles on the limit for number of days watering per week, about "Xeriscape" a type of gardening in low water environments that was invented specifically for the Colorado dessert environment, and rebates for the purchase of new "low water use" systems.

So, while the folks at Denver Water are trying to figure out how to motivate customers to use less water, the folks in the Block Beautification Program are working to make sure each resident uses more water than necessary.

People Involved: 


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