Re: double-entry accounting :: Time to understand accounting rather than just bookkeeping V2

[David Farber <dave () farber net>]

Begin forwarded message:

From: Scott Moskowitz <scott () bluespike com>
Date: August 31, 2008 11:24:45 AM EDT
To: Bob Frankston <Bob19-0501 () bobf frankston com>
Cc: Dave Farber <dave () farber net>
Subject: double-entry accounting :: [IP] Time to understand accounting  
rather than just bookkeeping V2

Bob:

As argued repeatedly, I absolutely agree with you & add that the  
double-entry accounting systems we have in place for modern commerce  
may be the most undervalued innovation at the heart of all market  
economies. (Prozac a close second?)

Attribution for what is the network? What is information? What is  
value? Whose "last mile"? Whose bandwdith? Whose computational output?  
Whose "ownership"?

These questions are exceedingly reduced to private enterprise TOS &  
artificial legislative policy ignorant of the inherent fungibility of  
informational value, trust & the notion that security should be  
treated more like insurance (credit to Dan Geer's observations in that  
regard). The extent and pervasiveness of subjective policy decisions  
now clearly undermine the contributions of true innovators (& of  
course, most harshly, inventors) while the market has essentially  
"policed itself" - up until a private company loses money ...

We have created & invented tools for accounting intangibles for over  
15 years. We believe the *noise* that obscures what we pay for - the  
actual "willingness to pay" - is equally obscured by the enormous  
explosion in "exotic" financial instruments - essentially providers of  
any good or service can get paid in more ways, faster than at any time  
in history. Does anyone remember money couriers? How about those pesky  
credit card books you received as a retailer every week?

My pet peeve surrounds the creation of an equitable balance between  
the digital copy problem (AKA "piracy" or is it "marketing") and  
privacy (AKA "the right to be left alone" - most egregiously such  
problems as ID Theft). Eg, simplistically, my social security number  
in consideration for your copyrighted work. Both are issues that  
concern the same set of security & fairness issues. In the end,  
whatever the cost, no one can replace you - but who should be  
accountable to this form of piracy? At what cost?

Maximize the value of a bit in a bit per time calculation and you will  
maximize the *value* of the network. But, we need to get agreement on  
the accounting system[s] first & that includes such otherwise mundane  
financial activity as securitizing bandwidth to make it more liquid  
for users; defining the last mile and what the user "owns"; making the  
system as transparent as, say, your 1040 ;-); and, treating bandwidth  
as currency.

Great dialog!

Prof. Farber - special thanks for keeping all of us on track (&  
getting many true innovators & inventors some mind-share as they are  
all truly interesting people!)

Sincerely,
Scott Moskowitz
http://www.bluespike.com/




On Aug 31, 2008, at 6:31 AM, David Farber wrote:

> Begin forwarded message:
>
> From: "Bob Frankston" <Bob19-0501 () bobf frankston com>
> Date: August 30, 2008 9:41:55 PM EDT
> To: <dave () farber net>, "'ip'" <ip () v2 listbox com>
> Subject: Time to understand accounting rather than just bookkeeping V2
>
> After writing the comments below I realize that not understanding  
> the concepts of accounting is only one issue. It was hard for  
> Eisenhower and Gore to get people to buy into the idea of  
> interstates too – even after the examples of the Autobahn and  
> Eisenhower’s experience after WW-I (one). The highway analogy isn’t  
> perfect but as I’ve said (quoting Andy Lippmann) networking is  
> something we do and not necessarily a service. We need to get beyond  
> the idea that we must buy networking from a provider – once we do  
> then the rest is (relatively) easy.
>
> Bookkeeping is just applying the rules you’re given. Real accounting  
> is discovering effective measures that help you make decisions.
>
> We have accounting problem in the real sense of accounting. What are  
> the effective measures of value vs costs? The current models are all  
> based on century old telephony or railroad models. How do you cover  
> the cost of an office LAN? Not by measuring charging for each byte  
> but considering the overall value and funding it as necessary  
> overhead.
>
> Given how little of the potential capacity we are using it’s obvious  
> that the current measures leave us woefully shortchanged. What  
> percentage of the GDP would it cost to upgrade the current fiber at  
> the rate capacity increased in the 90’s? What percentage of the cost  
> of laying a highway is the cost of laying a few strands of fiber.
>
> Note that I say potential capacity – this is in terms of how much we  
> can light up, how much we can light up with new gear, how much we  
> can add to various rights of way, how much effective capacity we can  
> create by being smarter as in not doing everything with home runs  
> rebroadcasting the same video, how much we can gain by using  
> fungible bits instead of partitioning them etc etc etc.
>
> What is the value? In a multi-trillion dollar economy how many  
> billions should we invest? If we use the interstate highway system  
> as a cost/benefit model we should be able to do far better is the  
> cost/benefit of investing in this modern infrastructure?
>
> As long as we are fixated on counting bits we’ll lose the value of  
> what we can do with the bits. And counting bits is a major expensive  
> in its own right when you build an infrastructure whose primary  
> purpose is to assure that we can indeed account for bits. What other  
> reason is there for taking the network effect and throwing it away  
> by partitioning the capacity into teensy ISP slivers?
>
> We need an real accounting – not bean counting. Let’s not presume  
> or, worse, create scarcity just because we can’t count right.
>
> http://www.frankston.com/public
>
> http://www.frankston.com/?name=AssuringScarcity
>
>
>
> From: David Farber [mailto:dave () farber net]
> Sent: Saturday, August 30, 2008 20:33
> To: ip
> Subject: [IP] Re: do read !!! Comcast confirms 250GB cap effective  
> October 1
>
>
>
> Begin forwarded message:
>
> From: "Dr. Lawrence Roberts" <lroberts () anagran com>
> Date: August 30, 2008 1:16:14 AM EDT
> To: David Farber <dave () farber net>, Larry Roberts <lroberts () anagran com 
> >, dan () lynch com
> Subject: Re: Fwd: [IP] do read !!!  Comcast confirms 250GB cap  
> effective October 1
>
> Unfortunately, the problem is even worse for Japan and S. Korea. P2P  
> users are more common, the countries are small so most downloads or  
> uploads go international, and their High speed symmetric BB links  
> suffer far worse than our un-symmetric lower speed BB connections.  
> So they have major economic problems. They have tried DPI even  
> before us but it cannot find all the encrypted flows now so the  
> remaining 30% or the P2P users still can operate freely. The  
> remaining P2P users then spawn more flows and take up the same  
> 80-90% of the pooled capacity. The result is the average user get  
> very poor service.
>
> However going to a GB cap or a charge per GB is really bad as we  
> know. But put this down to flailing for a solution in the face of an  
> extremely bad situation. The Internet cannot stand up to this as  
> more and more applications discover the ease of getting more  
> capacity by using more flows.
>
> I continue to believe that equal capacity for equal pay instead of  
> equal capacity per flow is what we need to move to, since then  
> congestion will affect us all fairly (as it used to). But how does  
> one convince the world?
> Larry
>
> At 02:12 PM 8/29/2008, David Farber wrote:
>
>
> Begin forwarded message:
>
> From: Dan Lynch <dan () lynch com>
> Date: August 29, 2008 2:37:05 PM EDT
> To: Dave Farber <dave () farber net>, Tony Lauck <tlauck () madriver com>
> Subject: Re: [IP] do read !!!  Comcast confirms 250GB cap effective
> October 1
>
> Thanks Tony.  Now I think it gets trickier here as a solution for a
> single
> AS (like Comcast) may not be very helpful for customers who span
> multiple
> Ases, if the intermediate systems do not also play by the same rules.
> Maybe
> someone like Mike O'Dell can offer his deep experience here?  Or Larry
> Roberts whose new company, Anagran, is wrestling with this issue of
> "fairness" across a long haul.  We do need some "rules of the road"  
> that
> benefit everyone or no one will win very much.  Right now those
> countries
> that are overprovisioning (like Japan, South Korea and Finland) look
> pretty
> smart and don't have to address the fairness issue (yet).
>
> Dan
>
>
> On 8/29/08 10:13 AM, "Dave Farber" <dave () farber net> wrote:
>
>
>
> Begin forwarded message:
>
> From: Tony Lauck <tlauck () madriver com>
> Date: August 29, 2008 12:55:28 PM EDT
> To: Dan Lynch <dan () lynch com>
> Cc: "'David Farber'" <dave () farber net>
> Subject: Re: [IP] Re:   do read Comcast confirms 250GB cap effective
> October 1
>
> Dan,
>
> Yes, a cap will solve the congestion problem if it is set sufficiently
> low.  In the limit it definitely solves the congestion problem by
> driving away all the customers. (The Prodigy solution.)
>
> The problem is that congestion is caused by instantaneous load
> exceeding capacity, whereas monthly usage measures average load. If
> there are, say, four busy hours per day, an average based cap will
> need to be set (roughly) six times lower than it would otherwise need
> to be. The result will be unhappy customers. In addition, the bean
> counters (who are unlikely to know any queuing theory) may suggest
> that expenses be cut by reducing resources!
>
> I have written many IP posts on this subject and you can find them in
> the archive. Basically, a proper solution is to give higher priority
> to users who create less congestion. Let everybody go as fast as they
> want when there is no congestion. If people need or want more capacity
> than others, let them pay more for more "shares" and adjust the
> weighting accordingly, and use the money to increase capacity. This
> approach is politically neutral, i.e. it will work in a capitalist or
> a socialist society. Unlike the Comcast cap it follows the principle
> of maximum utilization of resources.
>
> Tony Lauck
> https://www.aglauck.com
>
>
>
> Dan Lynch wrote:
> Tony, can you teach me how a cap does not solve their congestion
> problem?
> In the limit it sure does...
> Thanks,
> Dan
>
>
>
>
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>
> Tel. 707-967-0203   Cell  650-776-7313
> My assistant is Dori Kirk   Tel. 707-255-7094  dori () lynch com
>
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>
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>
> Dr. Lawrence G. Roberts,  Ph:+1 650-906-8746,  W:  www.anagran.com,  
> E:    lroberts () anagran com
> Founder, Chairman, Chief Architect, Anagran, Inc., 580 Pastoria  
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