Japan’s 7-Eleven kingpin looks to U.S. to inspire online revolution

BY TAIGA URANAKA AND RITSUKO SHIMIZU

(Reuters) – The 81-year-old Japanese executive who built 7-Eleven into the world’s biggest convenience store chain has a new mission: turning more than 50,000 bricks and mortar stores in Japan into portals to a new online retail empire.

To do it, Toshifumi Suzuki, the chief executive of department store to mail order retailer Seven & I Holdings Co, is once again seeking inspiration in the United States. It’s over 40 years since he kickstarted a revolution in Japanese retail by bringing 7-Eleven stores across the Pacific, eventually buying the U.S. owners after they sought bankruptcy protection.

In Suzuki’s future vision, goods ordered online from Seven & I’s department stores and supermarkets, as well as outside partners, will be delivered to and picked up from the thousands of 7-Eleven stores spread across Japan at customers’ convenience. Most are open 24 hours a day.

“I’ve been talking for a while inside the company about integrating the real (bricks and mortar) side with the Internet, but nobody was taking it seriously,” Suzuki told Reuters. In September, the Japanese retail guru decided to change all that.

He dispatched about 50 heads of the group’s companies – his top lieutenants – on a mission to the U.S. He instructed them to visit retailers like Macy’s Inc, shopping malls and Internet companies, examples of what he called “omnichannel” integration that are beginning to yield results – with orders to figure out how to apply it in Japan.

“In the U.S. they observed, they listened and they realized that this was possible, and now they’re all motivated,” Suzuki said.

SEEKING PARTNERS

Suzuki said the company is already in discussions on point-of-pickup arrangements for Japan with online retailers, including major players.

“We’ve had lots of approaches from people wanting to be partners,” Suzuki said, althoughAmazon.com is not among them.

At the moment, 7-Eleven’s stores in Japan don’t offer the range of e-commerce services available at their U.S. counterparts. On the other side of the Pacific, for example, 7-Eleven maintains dedicated lockers for picking up merchandise ordered online from Amazon.

Amazon does have point-of-pickup arrangements with 7-Eleven’s chief Japan rivals, FamilyMart Co Ltd and Lawson Inc. But 7-Eleven only offers such services for limited online product offerings, such as upscale cosmetics, purchased from other Seven and I retailers.

With no plans to step down any time soon, Suzuki has a reputation for a willingness toinnovate and make big plays. In 1991, his company acquired a majority stake in its U.S. mentor and original 7-Eleven Inc owner Southland Corp.

The Japanese company then turned its U.S. unit around, transferring sophisticated data systems developed in the U.S. but refined in Japan, to manage inventories and optimize merchandise strategy at individual stores.

The company also pioneered many of the services and products – freshly prepared “bento” box meals, 24-hour banking and bill payments, a premium private label brand – that made Japan’s convenience stores and especially 7-Eleven among the most profitable in the world.

To bolster its offerings in other retail segments, this month it acquired a 49.9 percent stake in the operator of 10 Barneys New York high-end apparel stores in Japan.

(Editing by Edmund Klamann and Kenneth Maxwell)

Biodegradable Batteries to Power Smart Medical Devices

Prototype batteries that dissolve safely in the body could power ingested devices.

By Katherine Bourzac

Batteries made from pigments found in cuttlefish ink may lead to edible, dissolvable power sources for new kinds of medical devices. Researchers led by Carnegie Mellon University materials scientist Christopher Bettingerdemonstrated the new battery. “Instead of lithium and toxic electrolytes that work really well but aren’t biocompatible, we chose simple materials of biological origin,” Bettinger says.

Conventional battery materials are not safe inside the body unless they’re encased in bulky protective cases that must eventually be surgically removed. Electronics that can either be swallowed or implanted in the body without causing harm could monitor wound healing and disease progression, release drugs, and enable more sensitive neural and cardiovascular sensors and stimulators.

 

The prototype sodium-ion battery from the CMU researchers uses melanin from cuttlefish ink for the anode and manganese oxide as the cathode. All the materials in the battery break down into nontoxic components in the body.

The CMU group is working on edible electronics that can be swallowed like pills. These electronic medicines could let doctors deliver sensitive protein drugs—which are ordinarily destroyed in the stomach—orally rather than by injection. This could make therapies such as arthritis drugs that currently have to be given intravenously at the hospital much easier to take. Smart pills, says Bettinger, could carry sensors and circuits and release drugs only after they’ve passed the harsh environment of the stomach and reached the intestine, where the drugs would be absorbed into the body. Edible electronics could also be used by athletes to monitor their core body temperature and other body metrics.

The melanin batteries don’t match the performance of lithium-ion batteries, but they don’t have to in order to be useful, says Bettinger, who was named one ofMIT Technology Review’s 35 innovators under 35 in 2011. The prototypes, described in the journal Proceedings of the National Academy of Sciences, currently provide enough power to run simple sensors. Bettinger says they’re working to improve their power output and storage capacity by experimenting with different forms of melanin.

Bettinger’s group is not the first to propose electronic pills. A few companies, including Olympus, already make capsules that contain cameras; but these kinds of systems, which use traditional electronic and optical components to image the digestive system, can’t be swallowed regularly, says Bettinger.

Another company, Proteus Digital Health of Palo Alto, California, makes a personal-health monitoring system that includes pills affixed with digital identification tags. A small chip that stores an identifying number is sandwiched between two metal foils that act as a partial battery that the company’s chief technology officer, Mark Zdeblick, calls a “biogalvanic cell.” When the pill is swallowed, the metals come into contact with ions in the stomach, activating the device by enabling current to flow between the metal foils. The chip modulates the current flowing between the metal foils to produce a weak electrical field that is sensed by a patch worn by the patient. This allows people and medical professionals to monitor when they take their drugs.

John Rogers, a materials scientist who makes biodegradable electronics at the University of Illinois at Urbana-Champaign, says more power will be required for more sophisticated edible and implantable electronics, and one way to provide that is with full batteries like Bettinger’s.

Rogers is also working on biodegradable batteries for medical use. In a paper that will be published in the journal Advanced Materials, his team describes batteries made out of the dissolvable metals and trace minerals magnesium and molybdenum. Biodegradable batteries, Rogers says, will enable “devices that go into the body monitor wound healing, deliver therapy as necessary, and then naturally disappear after the wound is completely healed, thereby eliminating unnecessary strain on the body.”

Intel Robot Puts Touch Screens through Their Paces

A robot able to play touch screen games like Cut the Rope can judge whether humans will find a new device responsive.

By Tom Simonite

In a compact lab at Intel’s Silicon Valley headquarters, Oculus the robot is playing the hit game Cut the Rope on a smartphone. Using two fingers with rubbery pads on the ends, the robot crisply taps and swipes with micrometer precision through a level of the physics-based puzzler. It racks up a perfect score.

It’s a far cry from the menial work that Oculus’s robot arm was designed for: moving silicon wafers around in a chip fab. But it’s not just a party trick. Intel built Oculus to try to empirically test the responsiveness and “feel” of a touch screen to determine if humans will like it.

Oculus does that by analyzing how objects on a device’s screen respond to its touch. It “watches” the devices that it holds via a Hollywood production camera made by Red that captures video at 300 frames per second in higher than HD resolution. Software uses the footage to measure how a device reacts to Oculus—for example, how quickly and accurately the line in a drawing program follows the robot’s finger, how an onscreen keyboard responds to typing, or how well the screen scrolls and bounces when Oculus navigates a long list.

Numerical scores are converted into a rating between one and five using data from cognitive psychology experiments conducted by Intel to discover what people like in a touch interface. For those experiments, hundreds of people used touch screens set up to have different levels of responsiveness. These tests were devised by psychologists in Intel’s interaction and experience group, which studies the relationships people have with computers (see “Intel Anthropologist Questions the Smart Watch”).

The scores produced by Oculus and the psychological research have proved valuable to engineers at companies working on touch screen devices based around Intel chips. They’ve also been useful to Intel’s chip designers, says Matt Dunford, the company’s user experience manager. “We can predict precisely whether a machine will give people a good experience,” he says, “and give them numbers to say what areas need improving.”

The conventional approach would be to have a user experience expert test a touch screen and give his expert but personal assessment, says Dunford. That doesn’t always offer a specific indication of what needs to be tweaked to improve the feel of a device.

Intel won’t share specific details of how it defines the difference between a touch screen that is sluggish and one that is snappy. But robotics engineer Eddie Raleigh, who helped build Oculus, says a good touch screen follows a swiping finger with only tens of milliseconds of delay.

Intel’s tests on human subjects have also shown that perceptions of quality can vary significantly depending on how people are using a device. People unconsciously raise their standards when using a stylus, for example, says Raleigh. “People are used to pens and pencils, and so it has to be very fast, about one millisecond of delay,” he says. Meanwhile, children generally expect a quicker response from a touch screen than adults, whatever the context.

Raleigh says his team can take such differences into consideration when setting up Oculus for a test. “We can mimic a first-time user who is being slower or someone hopped up on caffeine and really going fast,” he says.

Intel currently has three Oculus robots at work and is completing a fourth. The device can be used on any touch screen device, from a smartphone up to an all-in-one PC. It uses a secondary camera to automatically adjust to new screen sizes.

Intel has also built semi-automated rigs to test the performance of audio systems on phones and tablets. A soundproofed chamber with a dummy head containing speakers and microphones and a camera is used to test the accuracy and responsiveness of voice-recognition and personal assistant apps. A range of sophisticated cameras and imagers are used to check the color a display shows.

Jason Huggins, co-founder and chief technology officer of Sauce Labs, a company that offers phone and Web app testing, says Oculus has secret cousins inside most major phone and tablet makers. “The Samsungs, LGs, and Apples all have these kinds of things, but they don’t talk about it because they don’t want their competitors knowing,” he says. Intel’s Dunford says Oculus represents an improvement on previous devices in the industry because it compares devices using data on how people actually perceive touch screens. Other robots, he says, tend to see how devices perform against certain fixed technical specifications.

 

Huggins is trying to widen access to such robots because he believes they could help app developers polish their software. He has created an open source design for a robot called Tapster that can operate touch devices using a conventional stylus, with much less finesse than Oculus but at a fraction of the price. Many of the parts can be made on a 3-D printer. Huggins has sold about 40 of the machines and is working on integrating a camera into the design.

“If I can make a robot that can actually test apps, I suspect there’s going to be a serious market,” he says. Software developers currently pay companies like Sauce Labs to test apps using either human workers or software that emulates a phone or Web browser. Huggins says having a robotic third option could be useful, and predicts that robotic testing of all kinds of computing devices will become more common.

“We have to think about this because software is not trapped inside a computer behind a keyboard and mouse anymore,” he says. “You’ve got phones, tablets, Tesla’s 17-inch touch screen, Google Glass, and Leap Motion, where there’s no touching at all. These things depend on people having eyeballs and fingers, so we have to create a robotic version of that.”

Google’s Robot Recruits Dominate DARPA’s Rescue Challenge

Two companies acquired by Google demonstrate remarkable feats of agility and dexterity (albeit slowly) at a competition held in Florida.

Crowds gathered at a NASCAR racetrack in Miami this weekend to witness a more sedate sport than usual, as some of the world’s most advanced legged robots inched their way through a range of emergency tasks, including clambering over rubble, clearing debris, and operating a fire hose. And two of the robot-makers acquired recently by Google, Boston Dynamics and Schaft, dominated the contest, giving some sense of why the company was so keen to snap them up.

In all, sixteen teams took part in the challenge (see photo gallery: “Robots to the Rescue, Slowly”). The robots were operated remotely but still required sophisticated automation to cope with the complexities and uncertainties faced when dealing with the real world. Teams scored points by completely tasks inspired by a real emergency faced at Fukushima-Daiichi nuclear disaster in 2011: as hydrogen leaked from the stricken plant, human rescue workers risked their lives trying to reach and operate a valve that might’ve stemmed the leak. The robots faced eight tasks: walking over uneven ground; moving chunks of debris from a walkway; turning a valve; drilling a hole in a wall; climbing a ladder; maneuvering through several doors; manipulating a hose; and driving a golf cart along a snaking course.

Such jobs are, of course, simple for humans. But creating machines capable of stepping into role of a rescue worker is no easy feat. Walking across uneven, unfamiliar terrain and reliably manipulating everyday objects remain incredibly difficult engineering challenges (which explains why the robots worked at speeds that often felt exasperatingly slow). But if such skills can be mastered, they could also be useful for much more than just rescue missions.

Schaft, a spin-out of the University of Tokyo that acquired by Google in recent months, won the contest with 27 out of a possible 32 points. The teams that placed second and fourth both used a humanoid robot called Atlas, developed by another Google recruit, Boston Dynamics (see “Google’s Latest Robot Acquisition Is the Smartest Yet”).  The second and fourth placed teams, from IHMC and MIT respectively, had just a few months to learn how to program and operate these Atlas machines. A team from CMU placed third with robot called CHIMP.

While much has been made of the military funding Boston Dynamics has received in the past, to understand what Google has planned for its robot acquisitions it may be more instructive to look at Schaft. This machine is the culmination of many years of research in Japan, inspired in large part by concerns over the country’s rapidly aging population.

In fact, Gill Pratt, the DARPA program manager in charge of the contest, believes that home help is the big business opportunity humanoid robots.

“Most people don’t realize that the military market is quite small compared to the commercial market. And the disaster marketplace is even smaller than that,” he said from the sidelines. “My feeling is that where these robots are really going to find their sweet spot is care for folks at the home—whether that’s for an aging population or other uses in the home.”

Pratt added that the challenges faced by the robots involved in the DARPA event are quite similar to those that would be faced in hospitals and nursing homes. “The rough terrain requirements of going up and down slopes will not be as great, but the robots will certainly have to go up and down stairs; people will leave clutter all over the floor. Because we arrange our houses to suit human beings, it’s very important that the robots have the same competencies of locomotion and manipulation as human beings do.”

A Breakthrough for Speeding Satellite Feeds

Satellite companies see promise in new technology to double bandwidth.

By David Talbot

An emerging data-coding technology could more than double bandwidth on satellite Internet connections, boosting service to developing countries, planes, and cruise ships—and fixing jerky, stop-and-start images from live video news feeds.

The work is described in a recent paper by researchers at MIT and its Lincoln Laboratory, together with colleagues at the Hamilton Institute in Maynooth, Ireland. They say that the gains could be as much as 20-fold in conditions where data losses are exceptionally large.

The advance could be most noticeable to television news watchers because it could end glitchy feeds from overseas correspondents. The satellite communications company Inmarsat plans to test the technology in 2014. “We are hoping it would give us clean video with fewer disruptions,” says Ammar Khan, whose title is design authority at the London-based company.

The technology involved is a variant on TCP (transmission control protocol), which governs basic Internet data delivery. Regular TCP delivers small packets of digital data in a way that confirms that they reach the intended destination intact and in the correct order. Built into TCP are systems for checking errors, requesting replacements for lost packets, and retrieving them.

But when this regular TCP is used on wireless networks, some bandwidth gets wasted on back-and-forth traffic to recover the inevitably dropped portions of a signal. This is a particularly large problem with satellites, because retrieving the lost parts requires round trips that can take a half a second or more.

The tweaked version of TCP being honed by the MIT group and colleagues instead sends mathematical functions describing multiple packets so that a receiving device, such as a satellite terminal, can solve for missing ones without having to refetch them. “You transfer more packets than what you normally would, but you don’t have to retransmit,” Khan says.

Inmarsat has more than 500,000 terminals around the world, installed on cruise ships, fishing boats, passenger jets, rooftops of office buildings (common for backup service), and on trucks and other equipment used by news organizations. Users could benefit in all of these contexts, Khan says.

 

The new coding technology has been shown to work in lab simulations, and in 2014 is expected to be subject to testing in an environment that emulates the long travel times and typical data losses found on satellites. If it shows promise, it would be tested on real satellites and considered for commercialization, Khan says.

Satellites tend to deliver communications to the very richest and the very poorest, but at a high cost. In places like rural Africa, where there are no fiber-optic connections, it can cost $2,000 to $3,000 per month to provide one megabit per month of satellite service, leaving people unable to afford much more than crucial text transmissions. Doubling bandwidth from satellites “would make a marked difference,” says Riyaz Bachani, CEO of Wananchi, an Internet provider in Nairobi, Kenya.

The rich have their problems, too. In certain constrained environments, like cruise ships, it can be challenging to give crowds of smartphone owners the bandwidth they’re accustomed to having in Boston or Palo Alto.

Satellite technology already includes some interesting methods to beef up service. But while the industry has deployed a number of technologies to improve “spectral efficiency,” companies have almost run out of tricks. “We’ve efficiently juiced a lot from all the other technologies we’ve used,” says Khan. “Network coding is a strong contender to boost further what we can do.”

The satellite transmission work expands on work Muriel Medard and colleagues at MIT have been pursuing in recent years to improve Wi-Fi and other terrestrial networks (see “A Bandwidth Breakthrough”) and even to improve efficiency on wired connections in data centers (see “A Smarter Algorithm Could Cut Energy Use in Data Centers by 35 Percent”).

Novel Circuit Shrinks Laptop Chargers, Could Improve Appliance Efficiency

A new kind of power adapter is barely bigger than a plug.

By Kevin Bullis

A startup called FINsix has developed laptop power adapters that are 75 percent smaller than their conventional counterparts. The technology employed could also be used to improve the efficiency of a wide variety of devices and appliances, including washing machines and air conditioners.

FINsix’s first product, which the company will unveil next month at the Consumer Electronics Show in Las Vegas, replaces a conventional charging brick with a device just a little bigger than an ordinary plug. The 65-watt power adapter—which delivers more power than many laptops use—can charge multiple devices at once. It will be available by the middle of next year.

 

The power adapter is the first commercial application of a novel circuit design developed byDavid Perreault, a professor of electrical engineering and computer science at MIT (see “Power Electronics to Improve Computer Efficiency” and “Efficiency Breakthrough Promises Smartphones That Use Half the Power”).

FINsix’s power adapter is an after-market charger that can work with a variety of laptops and other devices. The company is also working with a laptop manufacturer to produce a dedicated charger. The power adapter has the potential to be far cheaper than conventional ones, because it’s smaller, it’s simpler to manufacture, and it uses far less material.

In addition to shrinking power adapters, the new circuit design could reduce the size and cost of a variety of devices known collectively as power electronics. These devices manipulate electricity, changing properties such as voltage and converting between AC and DC power; they can precisely control the power that goes to electric motors and compressors. Better power electronics can improve the efficiency of, say, household air conditioners, but they typically aren’t used in such applications because of their high cost.

FINsix’s technology shrinks power electronics by increasing the frequency at which these devices operate. The higher the frequency, the smaller the device can be. But ordinarily, higher frequencies also reduce efficiency.

The researchers at MIT and FINsix developed a way to recycle much of the energy that’s normally lost inside a power adapter, improving efficiency and making it practical to use frequencies 1,000 times higher than those used in conventional power adapters. “The rest of the field is making incremental changes and getting diminishing returns,” says Charles Sullivan, a professor of engineering at Dartmouth, who is not involved with the company. But FINsix, he says, is “leaping past that barrier.”

Other academic researchers and companies are working to shrink the size of power electronics by turning to new materials, such as gallium nitride, that can operate more efficiently at high frequencies than the silicon semiconductor materials used now (see “Eliminating the Laptop Charging Brick”). But the new materials can be expensive and are limited to specialty applications. As these materials get cheaper and are more widely adopted, FINsix’s technology could be used in conjunction with them to make power electronics even smaller and more efficient.

Most Telecom Italia investors sign up to vote on board’s future

(Reuters) – Investors with a combined 53.8 percent stake in Telecom Italia have registered so far for a key shareholder meeting on December 20 that will decide whether to oust the board, the company said on Tuesday.

It means Telecom Italia’s controlling investor Telco – which has a 22.4 percent stake – will need the backing of other investors to fend off a proposal by rebel shareholders to remove the board. To pass, the proposal needs a majority of 50 percent plus one vote of shareholders at the meeting.

In a statement, Telecom Italia said the shares registered include a stake of over 4.8 percent held by U.S. giant investor BlackRock and its affiliates.

More shareholders can register between now and the meeting, which was called by Italian businessman Marco Fossati, a rebel investor with a 5 percent stake in Telecom Italia.

Telecom Italia is controlled by Telco, a holding company grouping Telefonica, Italian banksIntesa Sanpaolo and Mediobanca, and insurer Generali.

The vote could be crucial for the future strategy of Telecom Italia, and especially for its position in Brazil, where it is a direct competitor to Telefonica.

Fossati believes the influence of Telefonica could lead Telecom Italia to sell its prized Brazilian unit TIM Participacoes, reducing growth options for the Italian group.

(Reporting by Danilo Masoni; editing by Tom Pfeiffer)

Robots Are Becoming Ready to Work Among Us

Robots will be more useful when they can work alongside us, says Julie Shah.

By Julie Shah on December 17, 2013

Traditionally, robots were designed to work separately from people. That is starting to change as robots begin working alongside humans to courier medicine in hospitals and assemble complex machinery. New legged robots could soon accompany soldiers across treacherous terrain or perform rescue missions at stricken nuclear power facilities. But for the most part, robots still can’t function in human environments without requiring costly changes to people’s own working patterns.

Researchers are now beginning to understand how to build robots that can integrate seamlessly and safely into human spaces. One approach is to give them more humanlike physical capabilities. A human-size robot with legs, arms, and hands can use the same pathways, doors, and tools that we do, so the environment need not be laboriously retrofitted. Of course, a robot does not have to do a job the same way as a person. The Roomba vacuum cleaner appears to bounce randomly around the room, while we would employ a more efficient and methodical approach. However, the Roomba, unlike us, has only one job to do and does not get bored or impatient. In designing a robot’s physical capabilities, we must think carefully about the context in which it will be deployed and remember it isn’t necessarily bound by the considerations guiding the way people work.

 

The same applies as we begin to design robots intelligent enough to work alongside people. It is as impractical to redesign our work practices for robots as it is to redesign our physical world for them. We must instead build robots capable of doing their jobs with only minimal disruption to the people they work with or near.

This will require them to have mental models of what governs our actions. Robots can build these models the same ways people do: through communication, experience, and practice. We do not require that robots have our full human capabilities for decision-making, communication, or perception. Through careful study of effective human work practices, my own research group is designing robots with planning, sensing, and communication capabilities suited to their contexts. For example, our assembly-line robot learns when to retrieve the right tool by observing its human coworkers, without necessarily having to ask. Robots like this one work seamlessly with people and reduce the economic overhead of deploying new systems. As a result, it will soon be practical to extend human capability through human-robot teamwork.

Brain-Inspired Chips Will Allow Smartphones to Understand Us

We should look to biology to figure out how to make smartphones more ­helpful, says M. Anthony Lewis.

By M. Anthony Lewis on December 17, 2013

A modern smartphone is the most powerful information portal the world has known, integrating a traditional telephone with a powerful Internet-connected computer capable of navigating, playing multimedia, and taking photos. I think the next major step in smartphone evolution is obvious: the devices will become intelligent assistants that can perceive the environment and follow our commands. This will become possible thanks to progress in building chips inspired by the functioning of mammalian brains (see “Thinking in Silicon”).

We hope to achieve what I call embedded cognition—intelligence that resides on the mobile handset itself rather than on a distant server. We want devices that are always listening, watching, and paying attention to us, without compromising battery life. We need new kinds of algorithms to process streams of sensory data from sights, sounds, physical sensations, and more. We need our phones to be capable of learning so that they can come to understand their owner. And we need to stuff this intelligence inside compact, power-efficient hardware because we don’t want to transmit data off the smartphone for processing—a requirement that causes delays for users of Apple’s Siri and the Google Now app for Android phones.

 

A team of engineers and neuroscientists at Qualcomm Research is working on a new type of processor to meet those challenges. It takes design cues from the human brain, which despite using only about 20 watts of power is the most impressive and efficient “computer” that we know of at processing data from the real world—the kind we want smartphones to handle too.

The Zeroth processor, as it is called, works on data using silicon “neurons” that are linked into networks and communicate via electrical spikes. A system with a Zeroth processor can learn. In one test, researchers trained a wheeled robot to favor certain areas of a room by rewarding it when it was in the correct place. We also envision sensors modeled on the nervous system. They would conserve energy by reporting only when the environment had changed, instead of transmitting data constantly at all times.

This biologically inspired approach to computing should pave the way for the next major upgrade to the 130-gram marvel we call the smartphone.

Facebook’s Two Faces

By David Talbot

Last spring, Facebook founder Mark Zuckerberg invested in an impressive domain name: internet.org. Then, in August, he posted a video featuring snippets of John F. Kennedy’s “Strategy of Peace” speech and blogged that he would “share a rough proposal for how we can connect the next 5 billion people and a rough plan to work together as an industry to get there.” With that, Facebook and six corporate partners—including Nokia, Samsung, Qualcomm, and Ericsson—became part of a swelling movement of tech companies declaiming a commitment to connectivity, seemingly moved by the fact that only 2.7 billion of the world’s seven billion people have Internet access. In October, Google launched the Alliance for Affordable Internet (whose members include Facebook and Ericsson). It is pushing for cheaper Internet access through policy and regulatory reforms.

Behind the focus on the world’s unconnected lie some complicated realities. The companies involved tend to emphasize delivering more data to people who already have network access rather than extending communications connectivity to people who have none. And despite Zuckerberg’s lofty statements, Facebook in particular is falling short of some of Internet.org’s goals: the company isn’t investing in network extensions in developing countries, and its business practices, in many cases, have obligated Internet service providers in such places to incur extra costs.

Internet.org is still more of a press release than a plan. But its first formal statement, a 74-page white paper cosigned by base station maker Ericsson and chipset maker Qualcomm, is telling: it sets a goal of delivering data 100 times more efficiently to mobile phones, the devices most Internet newcomers will use to link to the Net.

Casting Facebook’s data efficiency plan as “the savior of the developing world” is “hard to swallow.”

Increasing efficiency is a perennial goal. And if it makes it possible for ISPs to offer broadband more cheaply, it could make people better off. (Research from the World Bank says that increasing broadband penetration in developing countries by 10 percent boosts their annual economic growth by 1.4 percentage points.) But getting people more data faster is quite a different objective from introducing connectivity in the first place.

Ground truths

Facebook is a major online presence around the world. Take Africa, where it often ranks first or second in popularity among websites. Yet Facebook doesn’t have data centers there, which means content generated by Facebook members in Kenya, for example, has to traverse undersea fiber-optic cables to data centers on other continents. That costs local ISPs at least $100 per month for each megabit of traffic. This charge wouldn’t apply if Facebook stored user content locally.

The ISPs pass those extra costs on to consumers—which surely can’t help Internet expansion efforts on a continent where only 16 percent of people have Internet access, compared with 39 percent worldwide. “It’s a bit disingenuous,” says PharesKariuki, who runs Angani, a cloud computing startup in Nairobi. “On the one hand, Facebook claims to want to give Africa access through
Internet.org, but when it comes to the business decisions they are making, as far as Africans are concerned, I have not seen anything that reflects that value yet.” (It is worth noting, however, that Akamai, the Web optimization service, is establishing infrastructure in more and more African locations. To the extent that Facebook uses Akamai’s service, it reduces the extra costs that ISPs in those regions would incur.)

As part of Internet.org, Zuckerberg published a white paper titled “Is Connectivity a Human Right?” in which he wrote that the company has “invested more than $1 billion to connect people in the developing world over the past few years.” But the details were absent: spent on what, to connect whom, and to what? Through a spokesman, Zuckerberg turned down an interview request. But on closer inspection, that statement apparently means “connect people to Facebook.”

Facebook spokesman Derick Mains e-mailed a clarification: the company, he wrote, hasn’t invested in any “physical buildout of infrastructure” to connect people. He declined to say where the $1 billion went, giving only one example: Facebook’s $70 million purchase of Snaptu, whose technology makes it possible for apps like Facebook’s to run on the basic phones that are common in developing countries.

Such acquisitions, of course, are meant to improve Facebook’s own operations: the company, like others, is keenly interested in having its service accessible on as many phones as possible. Facebook is also doing important work to develop ways of delivering information more efficiently to smartphones that run the dominant Android operating system, says Jay Parikh, Facebook’s vice president for infrastructure.

Facebook will surely come up with technologies that are useful on all kinds of mobile phones. But Ethan Zuckerman, who has helped lead several Web projects in poor countries, says that “to wrap that into a press release that turns Facebook into the savior of the developing world is hard to swallow.”

Tapping the airwaves

Other Internet companies have gone much further, funding Internet infrastructure projects that also happen to advance their own interests in getting more people to use their services.

One is in the capital city of Kampala, Uganda, a metropolis where you can get relatively slow connectivity from any of about 10 mobile carriers or Internet service providers. In November, Google announced that it had installed 170 kilometers of fiber-optic lines in Kampala, a major step forward that could enable local carriers and ISPs to provide faster speeds at lower prices. (Fewer than 1 percent of sub-Saharan Africans have fixed broadband, defined by the U.N.’s International Telecommunication Union as a data rate of two megabits per second; 11 percent have mobile broadband, defined as 3G or similar service.)

If Facebook really wants to connect more people, it should support cutting-edge wireless networks.

A handful of other projects are meant to provide Internet access where none previously existed at all. One is unfolding in the region around Nanyuki, Kenya, a town at the foot of Mount Kenya. In poor and sparsely populated areas like this, extending fiber makes no sense economically—wireless carriers often fail to recoup their investments in even conventional cellular base stations powered by diesel generators. But in Nanyuki, an experimental low-cost wireless Internet system is radically altering the economics.

It works like this: first, a powerful microwave transmitter delivers a high-bandwidth connection from a fiber terminus to several fixed wireless base stations over tens of kilometers. These base stations retransmit data on unused television frequencies—called “white spaces”—to 40 solar-powered Wi-Fi routers and phone-recharging stations in schools, clinics, businesses, and community centers. The Nanyuki apparatus already serves 20,000 people, and this capacity is set to triple. Most important, it does so for less than $5 per user per month—5 percent of the region’s average annual income
of $1,200.

The company behind this effort is Microsoft, but Google has just completed a similar trial to provide bandwidth to schools in Cape Town, South Africa. Companies are testing many other white-space efforts around the world. The impact could be large: what many places need is simple access to the airwaves, which is frequently restricted by national governments. “If you look around the world—whether in the U.S. or the Philippines—the issues around digital inclusion and universal access are mainly policy challenges,” says Paul Garnett, director of Microsoft’s technology policy group.

Reaching the remotest

But white spaces are only as good as the base stations and power supplies at the farthest endpoints. Vanu Bose, CEO of a company called Vanu that develops cheap cellular base stations, tells the story of an enterprising man in Zambia who collects cell phones every morning from his fellow villagers. He then drives three hours to a spot where he can get a signal from a cellular tower—and switches on all the phones so they can ingest all the text messages and voice mails that have accumulated since the previous day’s excursion.

This workaround is a reminder that there are still more than 200 million people in Africa alone who don’t even have the most basic cellular phone service. For Zambia, Bose has developed what he claims is the lowest-power base station on the market: a rugged unit that can connect to the Internet in a number of ways, including microwave links, satellite links, and white spaces, and serve up access to 1,000 villagers per node. All it needs is 50 watts of power from solar panels, with a few watts left over for a communal phone-charging dock. This provides very basic voice and data service and maybe one low-bandwidth Wi-Fi hot spot.

Broadband it ain’t. But such service can be transformational—enabling families to stay in touch, emergency medical aid to be summoned, educational materials to be delivered. “Internet.org is all about higher-capacity networks and more bandwidth,” Bose says. “But we shouldn’t think about bandwidth first but connectivity of any kind first. They are very different things. One communications transaction per day is infinitely better than zero.”

Beyond hyperefficient setups like Bose’s, Google has prototyped a new concept: fleets of solar-powered balloons in the stratosphere, networking among one another and beaming Internet connectivity to far-flung rural areas at speeds comparable to 3G. It’s been criticized as a marketing stunt, and it may not even work. But in contrast to Facebook’s effort to increase data efficiency, “at least it’s funky and new, at least it’s interesting, at least it’s ambitious,” says Ethan -Zuckerman, who today is director of the Center for Civic Media at MIT’s Media Lab.

Facebook says its focus is in the right place, and that helping more people who already own phones to afford data plans is a crucial job. That’s why the broad outlines of Internet.org involve figuring out how to deliver data more efficiently, in part through new business models. “A good way to look at it is that it’s a first step, and a really hard problem to solve,” says Aaron Bernstein, a former Qualcomm executive who is now a director of mobile partnerships at Facebook. And all the companies and organizations promoting and working toward Internet connectivity agree that there will be no silver bullet. “Only a lot of lead bullets,” as Facebook’s Parikh puts it.

But Facebook must shoot those bullets at the right targets. If the company really wants to make access more affordable, it can make sure its data is in the countries where people are using the service. If it really wants to connect more people, it can fund and support cutting-edge wireless networks. As John F. Kennedy said about the Peace Corps, 24 years before Zuckerberg was born: “Americans are willing to contribute. But the effort must be far greater than we have ever made in the past.”