Today's Lesson: Do Not F**k with the Negroponte Brothers

In light of the bush-league behavior of Intel in undercutting OLPC's education project with the meritless "Classmate PC", I read this morning with schadenfreude that the New York State attorney general is going after Intel ...

"Cuomo Subpoenas Intel Over Antitrust Accusations"  | Nicholas Confessore | The New York Times | 11 Jan 2008

While the inquiry does not overtly pertain to the recent behavior of Intel toward OLPC and the article does not mention OLPC at all, and while AMD has been pursuing lawsuits against Intel for anti-competitive practices in other locales for several years now, the chance seems remote to me that this new heat on the gorilla chip-maker is not directly connected to Intel's bullying of John Negroponte's little brother, Nicholas.

Nicholas Negroponte, OLPC's chief, has (despite being the one being assaulted) sounded like a whiny schoolgirl throughout a series of petulant, uncoordinated and apparently improvised complaints against Intel's CEO, Paul Otellini.

"A Little Laptop with Big Ambitions" | Stecklow & Bandler | The Wall Street Journal | 24 Nov 2007

"Negroponte on Intel's $100 laptop pullout" | interview with David Kirkpatrick | Fortune | 4 Jan 2008

Otellini, for his part, comes out looking only a few degrees worse, like a hapless corporate chieftain caught in the crossfire of the throwing tantrums of his own Board of Directors and also Bill Gates -- the real and undisputed czar of Intel -- both of whom are undoubtedly breaking Otellini's balls to win back the OLPC chip business from AMD (with, ironically, only disastrous implications for Intel's already weakening profit margins).

Clearly what has taken place is that Gates and Intel have together determined that OLPC -- which could eventually embed GNU/Linux in a global ecosystem of a billion or two billion computers for young people -- must not fly and must be halted at all costs. This is why Intel's salesforce is out in the field cajoling, threatening any OLPC-buying national education departments not to purchase OLPC. What is so surprising is that they have apparently been successful, even though Intel's alternative, the "Classmate," offers not comparable technology and no comparable value.

OLPC's President, Walter Bender, sets the mood straight today with a brief letter to The Wall Street Journal, telling of Intel's anti-competitive behavior:

"Intel is on the Outside of One Laptop Project" ...

"... OLPC even went so far as to help Intel improve its competitive offering by incorporating the unique features of our XO laptop. However, Intel didn't meet our cost, power or environmental specifications. In contrast, we have a very fruitful collaboration with AMD."

OLPC's ex key-"man", Mary Lou Jepsen, also clarifies in an interview with Groklaw's Sean Daly how piss-poor is the Intel Classmate's design ...

Mary Lou Jepsen: Where to start: Classmate is more expensive, consumes 10 times the power, has 1/3 the wifi range, and can't be used outside. Also, the Classmate doesn't use neighboring laptops to extend the reach of the internet via hopping (mesh-networking) like the XO does. So not only is the XO cheaper than the Classmate, the XO requires less infrastructre expenditure for electricity and for internet access. In Peru we can run off of solar during the day and handcrank at night for an additional $25 or so per student – this is one-time expense – the solar panel and the crank will last 10 or perhaps 20 years. Just try running electricity cables up and down the Peruvian Andes for that cost while making sure it's environmentally clean energy. The Classmate isn't as durable as the XO, and its screen is about 30% smaller, the batteries are the type that can explode and only last 1-2 years and can't be removed by the user and harm the environment. The batteries are expensive to replace: $30-40 per replacement. The XO batteries last for 5 years and cost less than $10 to replace. Finally, the XO is the greenest laptop ever made, the Classmate isn't – this matters a great deal when one proposes to put millions of them in the developing world.

My own speculation: with his brother in a high position, Nicholas Negroponte is not in the mood to lie down to Intel's (Microsoft's) co-manipulations here at the low end of the important education laptop segment. Not calling in a favor from the Empire State, or from Andrew Cuomo personally, may be too hard to resist, but it is the Negroponte's responsibility to apply pressure on the ugly establishment in whatever ways they are able. (I have no information that John Negroponte has involved himself in this matter. That conclusion is purely speculation on my part.)

Intel's cash costs and opportunity costs (in terms of further management distractions) are going up just through the New York State lawsuit, alone. That will proceed whatever the outcome, whether Intel joins OLPC and plays fair (which it may have to do to achieve the best outcome for itself).

It's about time we got into the "Chin-Music"! And it's good news for Free Software fans. This year, 2008, looks to be the year GNU/Linux players start to play hardball. We seem to be absorbing the necessary methods: some of the pitches need to be up & in if the other pitches, low and on the outside corner, are to be at all effective.

Fair is, apparently, fair in markets -- as in love & war.

Comments

[W^L+]

I'm sure there was no involvement by JN. Imagine the free pass to Intel if there was ever any "smoking gun" linking Negroponte to the state antitrust suit. Loud claims of "right-wing conspiracy" and Intel would walk off scot-free, because no other domestic prosecutor would dare come against them again.

[stumlbes]

Frankly I don't think many people would call it a "smoking gun" if Mr. Negroponte was the initiator of this antitrust suit and I don't think many people would care if it were true.

If the accounts of Intel's behavior are true and I don't think the OLPCs public accounting of it to be false, then Intel deserves every bit of scrutiny they get.

In my view, when a *for profit* company starts using such underhanded activities to bully the potential customers of a *non-profit* entity, well that just smacks of bullshit.

It would be one thing *if* as noted by OLPC had Intel lived up to just *one* of their obligations to be on their board (which they did not), or even if Intel was offering an alternative that was equal to or better than the OLPCs, which it is not.

In the end IMV, Intel should be raked over the coals and at the very least, their behavior against the OLPC *should* be used as supporting evidence.

[Orlando Native]

Why is it that some folks think that by just being a 'non-profit' organization it gives it an *automatic* right to be protected from competition?

Intel, Dell, and a host of other companies *sell* laptops as a part of their business. OLPC has now entered the fray. They didn't *originate* the market; the market was *already* there.

All laptops are not created equal. If they were, then just cheapest one with the 'best' (surely a subjective term) mix of features and reliability would have won out long ago.

If Intel, Dell, or any other laptop vendor can clearly make a case or come up with a package deal (that doesn't include anything illegal) that, for some reason, looks *better* to the entities *purchasing* the units, then good for them. That's free enterprise at work.

I don't dislike OLPC. I think it's a great idea; and I think that in many places it makes good sense... ...but I *also* don't think it's the end-all only way to necessarily achieve the desired result of educating poor or needy children and adults. One way, sure.

But whatever works in whatever particular circumstance is more important than just one foundation *always* winning in every locale.