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Cisco/China “Ruckus”

August 26, 2005 at 12:00 pm PST

A comment on a previous blog entry asked for a comment on the “Cisco/China Ruckus.” What that “ruckus” is: several bloggers and columnists have accused Cisco of selling equipment to the Chinese specifically designed to build their Internet censoring capability, their so-called “Golden Shield” project. I will copy directly from my learned and esteemed colleage, Terry Alberstein, head of PR for Cisco’s Asia/Pacific region, who sent the following to one of the bloggers:

“As one of the worlds leaders in Internet networking technology, Cisco Systems has played an important role in the growth of the Internet globally. Cisco has also played an important role in the development of the Internet in China. Today the Internet in China has over 100 million users, one of the largest Internet populations in the world, and continues to grow rapidly.

The networking hardware and software products that Cisco sells in China are exactly the same as we sell in every market in the world. And it is our users, not Cisco, that determine the applications that they deploy.

Beyond basic Internet protocol (IP)-based data, voice and video connectivity, Cisco’s products provide important network management functions, such as preventing unauthorized access to networks, helping to prevent and mitigate denial of service attacks, and protecting intellectual property. Cisco technologies also address important security functions such as blocking viruses from infecting a network, preventing hackers from stealing credit card numbers, protecting access to confidential medical information, helping Internet service providers administer billing, and allowing public libraries and parents to block young childrens access to particular websites.

Cisco is not in violation of the Foreign Relations Authorization Act. The act in question requires export licensing from the U.S. Department of Commerce for specifically designed policing equipment like shotguns, police helmets and handcuffs. Networking products from Cisco and our competitors are not covered by this legislation. A full list of these items can be found at the Department of Commerce link below:

Cisco Systems does not participate in the censorship of information by governments. Moreover, Cisco complies with U.S. Government regulations, which prohibit sale of our products to certain destinations; or to users who misuse our products or resell them to prohibited users.

Cisco does sell networking equipment to law enforcement agencies around the world, including in China, in compliance with U.S. Department of Commerce regulations. Our products offer benefits through the networking of computing devices that aid in the effectiveness and timeliness of law enforcement. We also sell our products to many public sector organizations like universities, municipal governments, utilities, etc. Additionally, the market for networking products in China is highly competitive -- we have strong competition in that market from French, Japanese, Canadian, Korean and Chinese competitors.

With respect to service and training of our products, all Cisco customers globally have access to Cisco training and support. We provide service and support, either directly by Cisco or, in many cases, through systems integration partners for our equipment. However, these services do not entail the day to day management of networks. Our service and post-sales support is designed to replace faulty or defective products, and to provide training for the proper operation and configuration of network hardware.”

Hope that helps clarify the official Cisco position.

Aspen Summit: Progress and Freedom Foundation (PFF)

August 25, 2005 at 12:00 pm PST

I just returned from several days in Aspen from PFF’s 10th annual Aspen Summit…PFF is a think tank that advocates free-market approaches over government regulations. The theme of this year’s conference was “Building a Digital Ownership Society -- The Place for Property and Commons.” My overall thoughts on the conference were that the keynotes were particularly interesting and semi-provocative while the panels were generally love fests with some disagreement on the issues around the edges.

“Aspen, what a boondoggle,” everybody said to me upon my return. Wish that it were true. Aspen IS beautiful, but the interior of a hotel in Aspen is very similar to the interior of a hotel anywhere. Although the hotdog cart in “downtown” Aspen stays open 24 hours which can come in handy.

Webcasts of the keynotes and panels will be available in full…some are posted already… Here are some of my personal thoughts on the keynotes:Keynotes posted: -- SUN President Jonathan Schwartz’ announced a new, free DRM solution (which sounded eerily similar to one that former Cisco-ite and former/current SUN-er Andy Bechtolsheim pitched while at Cisco.) I’m still pulling for this type of solution and Bechtolsheim is one of the smartest individuals I have ever met, so I’m sure this solution would work if implemented.- Edgar Bronfman, Chairman and CEO of Warner Music Group, gave a compelling address about technology and content industries working together…notable, because he sounded sincere. He also said that the battle between consumers and the music industry has already been waged. “We lost,” he said.- My mom taught me that if you can’t say anything nice, don’t say anything at all, so I will let you view Intuit CEO’s Steve Bennett address for yourself.- Mississippi Governor Haley Barbour’s address delivered the oft-heard message to technology companies in the room: “government doesn’t know what you do.” He did say that technology companies should reach out to governors on both side of the aisle as they were more likely to be quicker in working with technology companies on the policy issues that matter to them. You can view the aforementioned addresses here.

Those keynotes that aren’t yet posted, but worthwhile to view when posted are: -- William Owens -- CEO, Nortel -- Called on U.S. policymakers to develop a better vision for broadband deployment. News Story.- Tom Perkins, Founder, Kleiner Perkins -- Gave a bit of a history of venture capital as well as railed against SOX and stock option expensing. Tidbit that I did not know about him: he used to be married to Danielle Steele. Proudest company he helped fund: Genentech (KPCB funded them 100K and got a 33.3% stake -- for those of you keeping score at home, that 100K investment would be worth $30B+ today).

For you fact hounds, also published and now available is PFF’s treasure trove of data, Digital Economy Fact Book (7th edition). FULL of great information and stats.

Trade Test Teaches Important Lesson

Last night, the U.S. House of Representatives narrowly passed, 217-215, the U.S.-Central America-Dominican Republic Free Trade Agreement (so-called CAFTA-DR), H.R. 3045. Cisco and the U.S. tech industry supported passage of this bill, which the Senate also passed on June 30, 54-45. Now clear for signature into law by President Bush, implementation of this agreement will result in lowered tariffs on U.S. exports of tech products to CAFTA-DR countries, as well as liberalization of these countries’ telecommunications markets.

The politics of trade legislation have become increasingly complicated since the passage of the North American Free Trade Agreement (NAFTA) in the early 1990s. Ever-increasing global competition and recent fears of offshore outsourcing have heightened political pressures. These politics were evident in last night’s vote: 15 Democrats joined 202 Republicans to pass the legislation. Disappointingly, none of the Silicon Valley members, except Rep. Richard Pombo (R-CA-11), voted in support of the bill.

While speaking with the press about this vote, Ralph Hellman, VP at the Information Technology Industry Council, emphasized that the tech industry needs to do a better job of educating the Congress about the benefits of trade, “It’s incumbent upon the tech community to register our disappointment with those [no-vote] members in a variety of ways but continue the education process about why trade is important so we can have their support on bigger deals down the road.” The U.S. Government is negotiating a number of bilateral, regional and multilateral trade deals, which will eventually come before the Congress for approval.

Looking forward, while congressional passage of CAFTA-DR was ultimately successful, it sends an important message to free trade supporters, like me, that more education and engagement must be done to increase bipartisan support for trade. We’ve got our work cut out for us…

Vlogging: the next big thing?

July 26, 2005 at 12:00 pm PST

Read today’s New York Times story on video logging or “vlogging.” (Free registration required to access this site.)

I, of course, encourage adding all types of bits and bytes to the world wide web. It just so happens that much of that information flows over Cisco’s equipment, so it is ultimately good for our business, but I also think that more information is better than less information. Do I necessarily need to see a video post every day from a young man in England (see NYTimes story)? No, but I love creativity and I think this is a new canvas and a new medium and it takes all types of blogs and vlogs to build an audience.

Dial-up is good for e-mail, but not for streaming video, so vlogging is ultimately dependent on broadband -- which will bring added benefits to education, healthcare and telecommuting. If vlogging can bring more people to the broadband world, then more power to it. Vlogging could very well be the new postcard, the new way for an elected representative to communicate with constituents, the new way for an executive to communicate with employees, or it could simply be the way for Ian Mills of Keynes, England to show his vlog of him drinking raw eggs or spinning around until he is dizzy. Regardless, it puts us in touch with our fellow human beings in a real and tangible way, which I think is a good thing.

Cisco Chairman John Morgridge Testifies Before U.S. House Science Committee

July 23, 2005 at 12:00 pm PST

Yesterday, Cisco Chairman John Morgridge testified before the House Science Committee at a hearing entitled, “U.S. Competitiveness: The Innovation Challenge.” He was joined on the panel by the President of Johns Hopkins University, Dr. William Brody, and Mr. Nick Donofiro, EVP of Innovation and Technology at the IBM Corporation. All of the written testimony, the full webcast and the press release on the hearing can be viewed here.

Morgridge stated in his testimony, “It is becoming very clear that the United States can no longer take for granted our place as the global economic, technology, and innovation leader. There is much that government and industry can do to address this challenge, but we cannot be complacent in our response. We must recognize the challenge and take it head on if we hope to be successful.”

He suggested three areas where the U.S. should focus to keep the innovative and competitive spirit of the nation alive: 1) focus on education, particularly in K-12 math and science; 2) building appropriate physical insfrastructure, particularly ubiquitous broadband and new spectrum for wireless broadband; and 3) a proper legal framework, including a strengthened patent system and enforcement of existing intellectual property laws.

The hearing was well attended by members of the Committee, including two guest members of the Appropriations committee. All were generally on the same page that these are extremely important issues being addressed and that much more must be done to make other members of Congress aware of the vital importance of sufficiently funding long-term research and development, while also focusing on what can be done to encourage more students in math and science and help good teachers go and stay in these disciplines.

Chairman Boehlert quoted Mario Andretti at one point in referring to the deliberative nature of getting funding for important research and development projects, saying, “If you’re in control, you’re going too slow.”

I would encourage you to read Mr. Morgridge’s testimony, as well as the other testimony offered for this important hearing.