From today’s Washington Post:

The House approved a bill yesterday to bar states from taxing Internet access through 2014, clearing the way for President Bush to sign the measure into law before the current ban expires tomorrow.

The unanimous vote resolved a conflict with the Senate, which last week called for the longest-ever Internet-tax ban by passing the seven-year ban. The House had voted Oct. 16 to prohibit the taxes for four years.

… House Speaker Nancy Pelosi (D-Calif.) urged Bush to sign the bill immediately.

If signed by President Bush and passed into law, this bill will extend the existing federal law (enacted in 1998) that bans cities and states from taxing most Internet activity.

There are huge implications to this. For starters, it means that online shopping, which has become an extremely important part of the American economy and a huge convenience to many Americans’ lives, can continue to grow without being restricted by taxes.

However, it also means that government will get less and less tax revenue. That’s potentially a very bad omen, since the government will have to find that money elsewhere — no doubt, in the form of other kinds of taxes. (Which perhaps explains the political stances being taken: In general, Republicans favor taxing Internet commerce, whereas Democrats are in favor of keeping it tax-free.)

The legislation doesn’t apply to every facet of the Internet and “would allow states and cities to continue taxing all forms of telephone and pay-television service, even if carriers bundle those services with Internet access.”

Read the original article here.

Jessica Stillman, blogger for BNET, recently wrote a story about how digital life is increasingly locked into “beta mode”. (Read “Perfectionists Despair: Digital World ‘Always in Beta’” at BNET.)

What’s that mean? As more and more aspects of life are translated to the digital world, there’s an ever-increasing competition among businesses to win over the most customers by being the first company to release the newest thing — which often means releasing new software before it’s perfected and still in a somewhat experimental phase.

For companies, the benefits are obvious: Be the first one to offer consumers a new thing and watch ‘em line up. After all, there are few things today’s consumer loves more than to be the first person with the latest gadget or technology (iPhone, anyone?).

However, companies can also be hurt by this, for the obvious reason: Releasing a service or software that hasn’t yet been properly finished can backfire, creating support and/or PR nightmares in the process.

Still, that risk isn’t likely to stop most companies from continuing with this trend, especially the bigger ones, who are faced with a loss of prestige (not to mention market share) if a smaller company releases something before they do. Larger companies also have a much more stable network of service and support, so they’re better able to help ease customers into the new services and iron out all the wrinkles as they pop up.

Of course, all this stems from the Web 2.0 movement, which is catching fire lately. As Stillman writes in her blog:

While perfectionists and control freaks twitch in discomfort at the idea, with the pace of business now so fast, speed often trumps the need for a flawless release. Plus, with innovation at a premium, requiring perfection can stifle people’s willingness to play and solve problems creatively.

As David Armano has pointed out in Business Week, consumers are not really consumers anymore. Not only do they consume products, they also want to interact actively with them. The message traffic that used to flow one-way from marketers to consumers, now moves two ways. It’s a conversation which requires companies who want to appear responsive to consumer back chatter to tweak and revamp their products and marketing rapidly. What’s this mean? More and more initiatives are always in beta.

What do you think? Is this a necessary development, or a disturbing trend? We’re always interested in reading your comments, so sound off below and let us know what you think!

Unbelievable as it may seem, the Internet was born almost 40 years ago — in 1969.

Okay, so that date applies to ARPAnet, the network of computer interconnectivity that eventually became the Internet, rather than the Internet that we know today. Still, the basic fact is that this modern tool of information and commerce known as the Internet, so important to the daily lives of people all around the world, grew from an idea that was born in the 1960s.

And according to the man who oversaw that first Internet project back in ‘69, it’s time for an upgrade.

“We can no longer rely on last-generation technology, which has essentially remained unchanged for 40 years, to power Internet performance,” said Larry Roberts, as quoted earlier this month by Bobby White in the pages of the Wall Street Journal. Roberts was the man in charge of that original ARPAnet project. He’s now on a mission to upgrade the technology that underlies the Internet, which according to the article he believes to be “far behind the times”.

Why is an upgrade necessary? The case is pretty compelling:

The actions of Messrs. Bosack and Roberts fuel the growing debate over whether the Internet’s current infrastructure is sufficient to handle the explosion of bandwidth-hungry services such as Internet telephony and video. In a recent report, Cisco calculated that monthly Internet traffic in North America will increase 264% by 2011 to more than 7.8 million terabytes, or the equivalent of 40 trillion email messages. If such Internet traffic continues increasing, many believe networks could crash or at least slow to a crawl.

Among the proposed solutions:

To tackle the problem, a slew of start-ups are producing gear and software to accelerate Internet traffic or to increase the network’s capacity. These include companies run by Messrs. Roberts and Bosack, as well as Riverbed Technology Inc. and Big Band Networks Inc. Other companies, such as BitGravity Inc. and Limelight Networks Inc., are creating “parallel networks” — essentially scaled-down versions of the Internet — to escape the glut of traffic on current networks.

Whether or not these plans succeed, the very notion that the Internet itself needs updating is an interesting one, especially when one considers the central role it has taken not only in many people’s lives, but also in the very functioning of society.

Check out the original Wall Street Journal article here, and let us know what you think in the comments section, below.

No matter how often it’s said, it’s still true: We are indeed living in an historic period of time, when traditional models are giving way to new and exciting ways of living.

But, as always, old ways die hard.

Take the music industry. Earlier this month, best-selling musicians Radiohead decided to circumvent the record industry altogether and offer their new album for fans directly through a special website. (True, the album will be released later in a standard CD format in stores, but a record label hasn’t been decided on yet.) They may not strictly be the first act to have tried this, but they are the biggest, and the implications are huge, especially as the record industry struggles to maintain their business model as CD sales drop almost exponentially each year.

Similar changes are transforming other aspects of American life. Politicians are catering more to online bloggers and less to the old-school traditional media.

A similar (albeit much less dire) situation faces the television industry as it struggles to find a platform for reaching younger viewers who are much more likely to spend time online or with their iPods than sit in front of a television set. (That’s so 20th century … )

Witness the chaos as Apple spars with NBC over rights to air its television shows. From yesterday’s Washington Post:

… After Dec. 1, when Apple’s contract with NBC expires, all shows that NBC Universal owns, past and present, will disappear from the site. That includes shows from Sci Fi, USA and Bravo cable channels.

… NBC said that before the breakup, its shows accounted for 40 percent of all the television programs purchased on iTunes; Apple said the number was closer to 30 percent.

For Apple, the feud with NBC is the most recent ding in the company’s sleek, it-just-works image. A year ago, Apple added feature-length movies to its iTunes online music store, most for $9.99 each. But the only major studio that let its movies be sold on iTunes was the Walt Disney Co. — and [Apple CEO Steve] Jobs sits on Disney’s board. Since then, only two of the six other major studios — Paramount and Sony — have made some of their movies available for sale on iTunes. Movie studios fear damaging sales of their movies on DVD by undercutting their price on the online music store.

Get used to stories like this — we’re only going to see more as time goes on and modes of interaction get increasingly digital. And who knows where we’ll be in ten years – will the CD be obsolete? Will the traditional half-hour sitcom be watched more on handheld devices? What about commercials? Only time, it seems, will tell.

Though it may come as a mild surprise to some observers who thought Google already held the honor, a recent article in the Los Angeles Times made it official: Google is now “Silicon Valley’s most valuable company,” surpassing Cisco Systems Inc., the former top-earner.

The news stemmed from the company’s release of its third-quarter financial results, which far surpassed expectations. Google’s reputation as a new-model profit-earner — on top of its reputation as the Internet’s best search engine platform — is now all the more secure.

But the most interesting part of the news is that most of this jump in revenue can be attributed to its text-based advertising platform:

Google’s profit jumped 46% to $1.07 billion on a 57% rise in revenue to $4.23 billion, propelled by simple text ads on Web pages.

Why is this big news? Since Google has struggled in recent years to come up with new products and services that allow it to reach more and more consumers in ever-differing ways, strong ad revenue affirms the fact that, indeed, Internet searches remain its primary strength.

“The leaders of the company worry all the time about things that they think are missing from the product lineup, or strengthening the management team, or competing in markets around the world. This is not a complacent group of people,” [Former Google board member and venture capitalist Michael] Moritz said Wednesday at the Web 2.0 Summit in San Francisco. “What has been wrought at Google . . . is an extraordinary marvel.”

Google is famous for its Web search algorithm. But the company has clearly figured out the right formula for profit, said Jackson Securities analyst Brian Bolan. He ticked off the highlights: strength in the search advertising business and in brokering ads that appear on partners’ websites; solid revenue growth; tightened cost controls despite continued rapid hiring.

… Even with higher expenses, Google continues to prosper because of its dominance in online advertising. Google handled 57% of U.S. search queries in September, up from 56.5% in August, according to ComScore Inc.

Google executives underscored their experiments with new ways to distribute ads, including in videos from Google’s YouTube subsidiary, in interactive widgets and on television through its partner EchoStar Communications Corp. They also highlighted success in selling ads on mobile phones, particularly in Asia — a possible prelude to an announcement of a mobile operating system or even the often-rumored “Gphone.”

Read the original L.A. Times article here.