Poker’s Darkest Hour

In April, the US Government shut down three of the largest Poker Web Sites—Full Tilt Poker, PokerStars, and Absolute Poker—and indicted the owners of all Websites.  We all thought that the shut down was a little fishy, but as more details began to emerge, we discovered that maybe there was justification for the shutdown.  All three websites were required  to return money to users.  PokerStars was able to return money to its players, but Absolute Poker and Full Tilt Poker did not.  Phil Ivey, one of Full Tilt Poker’s players, decided to skip the WSOP in protest until all the money was repaid.  It wasn’t and Ivey missed the WSOP.  This week the US District Attorney in Manhattan provided a clue as to why Full Tilt Poker did not repay the Money.  In short, the charges against Full Tilt Poker state that it was a Global Ponzi Scheme in disguise and that it’s four largest shareholders, including “The Professor” Howard Lederer and Chris “Jesus” Ferguson, were getting huge amounts of cash from the scheme.  The indictments were the manifestation of Poker Announcer and Newspaper Columnist,Norman Chad’s worst nightmare.  Chad had always feared a Poker Ponzi-like scheme that could spell the end of the Poker Boom.  His column next Monday should be very telling on how bad the problem could be for poker.

As it is, it is becoming clear that “The Professor” and “Jesus”, if convicted, will be spending time in jail.  They also have pretty much played their last professional Poker hands.  How many other Full Tilt Poker players are in the scheme as well?  Is Ivey, Mike “The Mouth” Matusow, Erik Seidel, Jennifer Harmon, John Juanda, and others involved?  What about Greg “Fossilman” Raymer?  He switched from PokerStars to Full Tilt Poker this year—talk about bad timing.  Did he switch because he was promised money?  And does this Ponzi scheme extend to PokerStars and how many other players in PokerStars were involved?

So who are the losers in this situation and who will emerge for the better.  Here’s a quick rundown:

LOSERS:

ESPN-My guess is ESPN Programming on Poker will start to fade because of this crisis.  Sure, it’s cheap to produce, but how many people will still tune in?

Clients of Full Tilt Poker and Absolute Poker-I will guess that the Poker Players that were members of these Websites will never see their money returned.

Poker Pros of Full Tilt Poker and Absolute Poker-The professional players of these Websites will likely be villified and many of them will probably never be allowed to see the inside of a poker room again.  Many of them are some of the biggest names in Poker.

Those wanting Online Poker to be legalized in the US-This setback has probably cost Online Poker legalization nationally in the short run.  Ultimately, Online Poker could be legalized, but it could be sometime.

WINNERS:

Phil Hellmuth-Although the “Poker Brat” was loosely associated with Full Tilt, he left them years ago to work with Ultimate Bet.  So, it appears he is in the clear for now.  And two of the biggest threats to Hellmuth’s WSOP Bracelet record could be in the middle of the controversy.

Mike Sexton-The Poker Ambassador has taken advantage of the legal issues to try and draw people to Club WPT.com.  The question is whether Sexton’s Web Site is legal.  If so, the World Poker Tour may be one of the few Poker Games to survive.

Las Vegas-How does Las Vegas win if Poker loses?  Well, Poker does not build the Casinos in Vegas, other games do!  So, if Poker goes away, more people will go to the games and betting that bring in money to Vegas.

In short, this Scheme may end Big time Poker as we know it, but Vegas will survive are grow.  It may be a long time before Poker gets over this Crisis.

The Meaning of my 9/11 Picture on Facebook

Since I have been on Facebook, every 9/11 I have posted the same picture as my Profile Picture. It is a picture of Manhattan looking towards the Empire State Building. This is a picture I took on March 9, 1995 as part of Valparaiso University's Kantorei Spring Tour. The location is a given--especially considering I deliberately made sure 1 World Trade Center was in the Picture Foreground. It was taken from 2 World Trade Center (a.k.a. South Tower). I took it from the 107th Floor Observation Deck and it was one of 4 pictures I took with a primitive Kodak 35mm Camera. One picture was facing south towards the Statue of Liberty, one picture was facing east at the Brooklyn and Manhattan Bridges, and 2 were facing north towards midtown.

When 9/11 happened, I immediately found the pictures in my closet. I took the pictures facing south, east, and north and put them at my desk at work the first day I returned after 9/11. I put them in the direction I took them. So, the southern part of my desk has the picture facing south, the eastern part of my desk has the picture facing east, and the northern part of my desk has the picture facing north. Those pictures have never left my desk in the 10 years since. And if you know where I work, you may understand why I've done that. Put it simply: it drives my work.

I am grateful to have seen the towers before they fell. On that fateful March morning, I had a choice to visit the Towers or the Statue of Liberty. I chose the Towers because I thought going to the Statue of Liberty was going to take too long and be tight on schedule time--even though our director, "Doc", was going to Lady Liberty. It turned out to be a wise decision, and I am grateful to have seen the Towers up close before the events of that horrible September morning 6 years later.

I hope someday I can return to Lower Manhattan to "Ground Zero"--the new World Trade Center and it's memorial. I hope on that day to bring those pictures from work and leave them at the site as my way of sharing the WTC Experience pre-9/11. The memories of that chilly morning in 1995 when I visited the site the first time will be with me for the rest of my life--long after the significance of 9/11 disappears from most of mankind's memories.

A tale of Three Hurricanes…

In the fifteen years I have lived in Maryland, I have encountered several tropical systems that have dumped rain and wind on the area.  Being that any hurricanes that make landfall in the Carolinas usually have an eventual impact on Maryland weather, we have seen several remnants of hurricanes such as Beryl, Earl, Charlie, and other storms.  But three systems have struck the upper Chesapeake region as either reduced Tropical Storms or Cat 1 Hurricanes.  Those three Hurricanes have also impacted during different times in my life, so my attitude towards these cyclones has differed as the years have progressed.  So, it’s very tough to rate the Hurricanes as to which is the worst.  I’ll try as we briefly go through each of the three storms:

(1)  Hurricane Floyd (1999):  Floyd made landfall near Cape Fear as a Category 2 Hurricane.  Although the storm had at one point been a Cat 4, the storm weakened as it approached the Carolina coastline.  Rapidly going through North Carolina and Virginia it briefly emerged in the Lower Chesapeake Bay before crossing into the Delmarva peninsula as a Tropical Storm and ultimately New Jersey.  The storm caused extensive damage in North Carolina, knocked out power to 500,000 BGE customers in Maryland, and flooded Maryland and New Jersey.

As someone who was a bachelor and living in a apartment at age 25 at the time, I was intrigued by experiencing my first Hurricane.  I had very little invested in a place and I was living in a 2nd floor apartment, so I thought I had very little to worry.  I was at work the day Floyd’s effects hit central Maryland.  It was a lot of rain and some wind, but there was no real concern for the storm.  Most people took the storm in stride and there was little panic.  I never lost power during the storm.  By the time I left work, the worst of the storm had passed.  The next day was one of the cleanest skies I had ever seen and the cool air felt great for several days afterwards.

(2)  Hurricane Isabel (2003):  Isabel made landfall in the Outer Banks of North Carolina as a Category 2 Hurricane, but it had a brief history as a Category 5 storm out in the Atlantic.  It crashed into eastern North Carolina, then rolled into the heart of Virginia as a Tropical Storm driving up into the Western Maryland mountains and Pennsylvania where it became extra-tropical.  Isabel caused massive Power Outages in Virginia (2+ million customers) and Maryland (over a million Pepco and BGE customers lost power).  The storm also brought a tidal surge into the Chesapeake Bay that flooded downtown Annapolis, the Baltimore Inner Harbor, and western Chesapeake Bay ports.

With this storm, I was still a bachelor, but I was now nearly 30 and had a townhouse of my own to call home.  The warnings were clear and everyone was told to prepare for power being out for multiple days.  The tree behind my house was the big concern.  I also locked everything down in the tool shed and inside the house to prevent the wind from blowing everything around.  The storm came through at night, so I slept downstairs in the family room, just in case the tree had come down on top of the bedroom.  The wind did blow substantially to the point of tropical storm force winds.  In the end, I never lost power, and the tree stayed up.  Before I went outside, I didn’t think it was a big deal.  Then I saw several downed trees in my neighborhood and driving around the area showed that power was out across a wide area.  Then I saw the pictures of the Naval Academy and the WTC-Baltimore under water.  That convinced me I made the right decision.

(3) Hurricane Irene (2011):  Irene, like Isabel, struck the Outer Banks as a Category 1 storm, but it had a path similar to Floyd.  Although it was not as strong at its peak as Floyd or Isabel (Cat 3 was the maximum), it was an immense storm with tropical storm force winds extending far out from the center.  By the time it passed near Ocean City, it was a minimum Cat 1, but the winds reached into Baltimore and D.C. and other cities up and down the East Coast.  Flooding, power outages, and downed trees were prevalent up and down the East Coast and damage and deaths extended across an area from South Carolina up to Maine and into Canada.

In this storm, I was a married 37-year old and a father of a two-year old living in a recently bought house.  So my concern was not just for me, but for my family.  I was more worried about this storm than the previous two.  Preparations was more intense.  Everything was battened down, the cars were gassed up and food was bought for the storm specifically.  Thankfully no trees were around.  The rain and wind struck their worst during the nighttime like Isabel.  When morning came, power had briefly gone out, but came back on.  Damage to the house was minimal.  Again, I had dodged the bullet of severe damage.

So, which hurricane was the worst?  By far, Floyd was not the worst of the three.  Flooding was more the concern.  As for Isabel and Irene?  It’s very close, but I give the nod of worst Hurricane to Isabel for two reasons:  First, the tidal surge in the Chesapeake Bay was devastating to areas along the western Chesapeake shoreline.  Second, the hype about Irene has been a little overblown.  Don’t get me wrong, Irene was a terrible storm and caused more damage than Isabel across a wider area.  But in Maryland, Isabel caused just slightly more problems.

The next hurricane to have a direct impact on Maryland will likely occur in the next 4-8 years.  When the next hurricane strikes, will we be ready?  And will the next Hurricane be as bad as the previous three?  Time will tell…

Why Sprint is NOT a victim in a proposed AT&T–T-Mobile merger…

So the DOJ has decided to file suit to block the proposed merger of AT&T and T-Mobile.  I have already laid out the arguments as to the positives, negatives, and why the mergers must go through.  But apparently, the DOJ did not use my reasoning as to why to block the merger, instead focusing on archaic thinking that we are seeing a new AT&T being formed in front of us.  And Sprint has been more than a cheerleader in this effort, basically asking DOJ to file the suit because they would be hurt by a larger AT&T.  But things aren’t what they appear, especially when it comes to Sprint.

It’s time for someone to say it:  Sprint is stuck in 3rd place, not because of AT&T and Verizon superiority, but because Sprint has made mistakes after mistakes in deploying their networks.  Sprint should have long dominated the cellular markets over the last 15 years, but their inability to be honest and their hesitation in massively deploying game-changing technology has destroyed their initial advantages in being first to the field.

Let’s start in 1996.  Sprint Spectrum was established in the DC area, becoming the first cellular carrier to go digital.  Sprint Spectrum used the European created standard called GSM in their digital cellular technology.  But after an initial buildout, Sprint failed to expand the network to meet the new demands of customers who lived outside cities and far from interstates.  Also, there was no way for Sprint Spectrum customers to go back to analog networks, once they left the digital network.

Meanwhile, it appeared that GSM was on it’s way to becoming the first true global communications standard.  But a funny thing happened on the way to GSM dominating the US.  Qualcomm’s dynamic duo of Irwin Jacobs and Andrew Viterbi convinced the US government that instead of putting all their resources towards the European standard, they should focus on their created digital cellular standard called CDMA.  Sprint fell under the allure of this new standard and every metropolitan area created after DC used the CDMA standard.  Ultimately, the DC network became a CDMA network as well.  Sprint initially wanted to drop all customers who were on the Sprint Spectrum network and force them to rejoin on the Sprint PCS network for a higher charge.  However, a lawsuit filed against Sprint eventually forced Sprint to integrate the Sprint Spectrum customers to Sprint PCS for free.

GSM and CDMA are considered 2G cellular technologies.  Worldwide, GSM was the accepted standard in the late 1990s, with the US and South Korea as the lone countries who had CDMA in their countries.  In the US, many cellular companies adopted CDMA, which was superior to GSM.  Only a few companies (Bell South and Omnicron were the main companies) who adopted GSM.  When 3G technologies were developed, the GSM consortium adopted the CDMA-type technologies that Viterbi and Jacobs had created.  However, while the CDMA consortium were settling on technologies that limited spectrum to force ease of being backwards compatible, GSM decided on a wider BW version of the CDMA-type tech.  While this made compatibility initially a challenge, it ultimately made GSM (now known as 3GPP) a better alternative.  So the companies that remained with GSM (Bell South ultimately became part of Cingular and later AT&T Wireless, while Omnicron became part of T-Mobile) had an eventually advantage over the CDMA (now 3GPP2 standard) companies (such as Bell Atlantic-later Verizon, MetroPCS, US Cellular, and Sprint).  So Sprint, in choosing CDMA over GSM won in the short term but lost out in the run with a slower CDMA2k and EV-DO technology.  Meanwhile, AT&T and T-Mobile had faster 3G technology speeds.

At the same time, Sprint failed to properly work with local government regulators to allow them to build their cellular networks out.  They instead tried to sneak their true intentions beside local government.  While it initially worked, eventually local governments got tired of Sprint not telling the full story.  They talked with other local government and realized Sprint was trying to pull a fast one, unlike AT&T and Verizon, who worked with local government in a more honest fashion.

Meanwhile, 4G technology was being developed and Sprint and a startup companies called Clearwire had begun buying spectrum just above the WiFi RF Spectrum to build the next generation network.  Initially the 3GPP2 standards worked on a tech called UMB.  But UMB ultimately was not created.  The 3GPP technology created a standard called LTE, and many 3GPP2 companies (such as Verizon and Metro PCS) adopted the tech.  But IEEE was also interested in developing a 4G tech after the successes of their WiFi tech.  They realized that 4G was going to be all about downloading data at high speeds and they had a better grasp on data-centric networks than the voice-centric networks of 3GPP and 3GPP2.  So, they created WiFi on steroids, also known as WiMAX.  Sprint and Clearwire adopted this standard as their 4G tech, thinking that computers would dominate the technology over cell phone. 

But again, a funny thing happened on the way to 4G dominance.  Apple created the world’s first smartphone, the iPhone.  The iPhone was a game-changer and many realized you didn’t need a laptop to access data at high speed.   Those who were going with the LTE technology now had an advantage.

At the same time, while Clearwire was building their network with a pre-WiMAX technology, Sprint was going through internal turmoil.  Sprint’s CEO at the time realized that building the WiMAX network out quickly was important, no matter the cost.  But Sprint’s Board of Directors and management, led by Dan Hesse, thought the move would bankrupt the company.  In the end, Hesse’s forces won.  Sprint delayed building the WiMAX network as Hesse became the new CEO.  Sprint also sold their spectrum to Clearwire, entering an agreement with the Craig McCaw company that Clearwire would build the WiMAX network and Sprint, Comcast, and other cable companies would share the network.  The WiMAX delay was costly.  As the network was being slowly developed, a 3GPP tech called HSPA+ was close to matching the speeds that WiMAX was projecting.  All the companies that were working with LTE realized that it was cheaper to remain with HSPA+ and wait for LTE technology to mature than to go to WiMAX.  So, WiMAX’s advantage was nullified.  And as time progressed, WiMAX’s time advantage over LTE was reduced to the point that LTE won the 4G tech battle even before they deployed the first US network.  Companies, such as 3GPP stalwarts AT&T and T-Mobile and 3GPP2 converts Verizon and MetroPCS now had the edge.  Even Clearwire started working towards converting to LTE.

As for Sprint?  Sprint has delayed announcing what they will do for 4G until October.  But the answer is obvious.  They will convert from WiMAX to LTE and probably try to force their WiMAX customers to pay to join the LTE network—just like they did with Sprint Spectrum.  They have entered an LTE agreement with Lightsquared, a company focused on LTE nationwide coverage.  And with Clearwire, they will have by far the largest spectrum—even larger than the spectrum a proposed AT&T-T-Mobile company would have.  And Sprint is not shy about talking about this advantage, bragging about it at Telcom Conferences.  But they feel threatened by a larger AT&T?

Sprint’s lack of vision has cost them dearly over the last 15 years.  And while they might have a good relationship with their customers, how long will it last as they have to change course in 4G from WiMAX to LTE?  If it wasn’t for Sprint’s flip-flopping back in 1996, they could be dominating the cellular world right now.  And their failures now will cost them 15 years into the future.  In the end, Sprint’s worst enemy is themselves, not AT&T or Verizon.

And what about a T-Mobile-Sprint merger?  When Sprint bought Nextel years ago, they were never able to resolve the tech differences.  The merger has been a technology headache.  So what do you think would happen if Sprint and T-Mobile merged with all their different cellular techs?  In short, the new company would be paralyzed for years trying to resolve the tech difference and would ultimately die, leaving a weaker AT&T, Verizon, and smaller telcos to pick up the spectrum pieces.

As I said, Sprint is their own worst enemy.  And unless someone comes in there and cleans up Sprint’s act, Sprint will at best stumble along, even though they should be crushing it in the cellular world.  Forget worrying about AT&T and Verizon, and start worrying about doing the right thing.