Hong Kong

I arrived at 11 P.M. at Hong Kong's Kai Tak airport, thinking that the God of Aviation must have been guarding me. A new gate opened up at customs just as I walked up, and my luggage was the first off the chute.

But, this apparent good fortunate was only to set me up for a cruel joke by the Aviation Deity. Once outside the airport terminal, I saw a line of several hundred people at the taxi stand. It was the end of the long weekend that marks Ching Ming, the Grave Sweeping Ceremony, and all the planes from the mainland had just returned.

I jumped the barrier to get out of line and walked up the road to where taxis were letting off customers. Standing with my baggage, the temptation proved too much for one driver. We both looked furtively around for police and I jumped in.

There were only two problems. He knew no English and he looked like he had been driving for at least 48 hours. We circled the freeways for 20 minutes until it was established that I was going to "Number One Hotel, Happy Valley." Actually, Happy Valley had only one hotel, so number one didn't mean much, but it did get us heading the right direction.

The sleep problem was a bit scarier. Every time his head would start to nod, he would jerk up suddenly and then wave his arms around in spasmodic circles, presumably to get the circulation go ing. I know it certainly kept me awake.

The next morning, I strolled over to see Edwin Yeung, an MIS manager at the Royal Hong Kong Jockey Club. The Jockey Club is to Hong Kong what the Louvre is to Paris. Gambling is the national pastime and the Jockey Club is the national icon.

Officially, the Jockey Club is the only place you can bet in Hong Kong. In practice, of course, all sorts of other gambling takes place ranging from bookies to mahjong parlors. In theory, though, if you want to gamble you go to the neighboring island of Macau. If you want to bet you go to the Jockey Club.

Founded in 1884, the club is run as a non-profit organization. It makes so much of a non-profit that it is, by far, the largest charity in Hong Kong. In the 1990-91 season, for example, the club handed over HK $1.04 billion (U.S. $138 million) to charity.

The club conducts 67 racing days a year, either in Happy Valley or at the mammoth new Shah Tin racetrack. A Diamond Vision system, like that used in U.S. football stadiums, shows the race at the track not being used, allowing overflow crowds to go to the alternate location to watch the races and, of course, place bets.

This is what you might call a serious transaction processing application. In the 1990-1991 season, over 187 million bets were placed for over HK $47 billion (roughly U.S. $8 billion). On a typical race day, 2.8 million bets were placed. To make this especially challenging, the vast majority of bets were placed within the last 10 minutes before a race, yielding a transaction processing rate of over 600 per second.

Like a bank, this is a system that better not make mistakes. Unlike a bank, this was a system that you really don't want going down (or even slow) right before a race. A bank can afford a few minutes' delay, but bettors don't appreciate having to wait until the race has started to have their money refused.

To funnel these bets into their coffers, the Jockey Club uses two main systems. Cashbet is for people handing over cash, and Telebet handles people who maintain accounts with the club.

Cashbet consists of terminals that accept money, or debit cards which lift money right out of a bank account using electronic funds transfer. The Jockey Club operates 127 off-course betting counters. These have roughly 2,900 terminals staffed by operators. Another 2,900 operator-staffed terminals are at the two race tracks. In locations throughout the city, people can place their own bets at 144 Electronic Funds Transfer (EFT) terminals and 700 cash-based terminals.

Off-course centers use 275 leased lines to connect to a series of 12 PDP 11/44s that act as front-end processors. Another 16 PDPs handle the terminals at the race tracks.

The Telebet system allows customers who maintain an account with the club to place their bets remotely. Bettors can place bets using a telephone or using a special custom terminal developed by the club.

The telephone system is quite simple. You place a call and are routed to one of 1,600 operators at Sharm or 388 operators at an off-site facility on Tsing Yi island. The incoming lines are all connected to a bank of over 2,000 voice recording lines to resolve any later disputes. An average of ten times each race day, a particular conversation has to be located.

Each operator on the Telebet system has a terminal which is connected to a series of VAX 3100s and PDP 11/44s. Operators enter the bets into the system and the bets make their way through the Jockey Club network.

Rather than continuing to add operators to service increased demand, the Club decided to design a custom portable betting terminal, known as the Customer Information Terminal (CIT). Bets are entered using a series of menus on a touch screen. Then, the device is plugged into a nearby phone jack where it autodials the Jockey Club network, using banking-standard cryptographic security to protect the line. The bet is placed, the customer's account debited, and the line cleared, all in a few seconds. A voice transaction could easily take a minute.

The amount of time per transaction is a real issue for this application. Ten minutes before race time, the number of calls completed on the phone network spikes to 20 to 30 times over normal levels. In fact, the telephone system was so overloaded that it was estimated that only one in eleven call attempts actually got through to an operator queue. In other words, to handle the Jockey Club load at race time would require a telephone network designed to handle more than 200 times the normal load.

To alleviate the load, a dollar minimum on bets was imposed five minutes before race time, but even this didn't solve the problem. The key was reducing the connect time per transaction to funnel more transactions into the available capacity.

The typical CIT customer could be described as a Hong Kong Yuppie. The devices requires a deposit (the interest from the de posit covers the unit cost in five years) and a service fee. Over 30,000 CIT terminals are in the field. Higher numbers had not been shipped, the Jockey Club said, because of a bottleneck in manufacturing which had limited production to only 400 units per month.

Once a bet makes it through the front-end systems, it hits the Jockey Club back-end network, based on lots of VAXen. In fact, the Jockey Club is Digital's largest customer in Asia. It has struck quite a few people as ironic that such a major customer for the straight laced Digital should be a major betting operation.

The club maintains 10 VAX Clusters at the two race tracks, with a total of over 30 large systems, 22 HSC controllers, and 100 Gbytes of disk space. In addition to the VAXen, special data security mod ules on the network provides authentication for Telebet based on a 6-digit PIN code. Other systems control the video display and provide links to disseminate race results to other networks, including a paging system, newspapers, X.25 networks, and Hutchison Mobile Data's packet radio network.

On race day, the two sites share processing and back each other up in case of failure. Transactions are logged at both sites. Connecting all this together are dual Ethernets at each site and an FDDI backbone that spans more than 20 km, using single-mode fiber provided by the telephone company.

The club has an aggressive policy towards vendors and technology, often telling the vendors what to make instead of being content to choose from glossy brochures. When their first network went in, John Markwell who would later become the Head of Information Technology (the senior MIS position), designed a custom data link protocol. For the CIT terminal, the Club participated heavily in the design.

While this heavy involvement caused occasional grumbles from vendors and caused the staff to have a bit of NIH (Not Invented Here) syndrome, you couldn't argue with success. The system worked, and worked well enough that it has been licensed to similar operations in eight countries.

After my briefing, I was taken on a tour of the facilities. In the machine room, I was asked to put on a white lab coat. Lots of technicians with windbreakers, baseball caps, and tennis shoes were walking around inside the machine room, making my medical outfit a bit superfluous, kind of like smoking a cigarette in the clean room of a semiconductor factory.

After the tour, I suggested that we all go out to lunch. I suggested (rather strongly in fact) that Chinese food was in order. A worried look crossed my hosts' faces who had evidently been planning on taking me out for Western food just to be safe, but they led me through the lunchtime throngs to a place jammed with people. We had a nice lunch of noodles, sesame shrimp cakes, and Peking style chicken, and I grabbed a pair of chopsticks and dived in, to the evident relief of my hosts.

After lunch, I left the Jockey Club and boarded the subway to Sham Shui Po to visit the Golden Shopping Center, the red-light district of the computer industry. The Golden Shopping Center is like a sleazy version of Akihabara, all packed into three floors of an immense building crammed with warrens of shops. There are three reasons to go to the Golden Shopping Center: cheap hardware, pirated soft ware, and counterfeit books. Whenever I go, I make three passes through the place.

First, I look to see if any of my books have been pirated into Chinese. Figuring that my descriptions of DECnet Phase V (a book I like to think of as "paperware about vaporware") wouldn't be any more popular in Chinese than in English, I searched instead for my Novell book.

To tell the truth, I always kind of hope to see my books. Van Nostrand Reinhold, the legitimate publisher, had kept my books such a tightly guarded secret that I would have welcomed having somebody read them, even at the cost of no royalties.

I soon became convinced that I was not a celebrity in this district, so I made my second pass to look at software piracy. Stopping in stalls with names like Dream Maker and Ultimate System Company, I perused the lists. Each shop maintained a master list, a menu du jour of illicit data, if you will.

Software here was priced by the disk. Low-density disks were HK $15 (U.S. $2) each, high-density disks are HK $25 (U.S. $3). To see how much your favorite software would cost, simply count how many disks it is distributed on. Each list had several hundred soft ware titles, each title with the number of disks written next to it. In the U.S., I had just purchased Microsoft Word for Windows under an extra-special rebate program for U.S. $129. The Golden Shop ping Center was having a special sale for U.S. $12.50.

Particularly impressive were programs like AUTOCAD (15 high-density disks) or even a full distribution of SCO's Open Desktop, a wonderful combination of UNIX, Ingres, Motif, and a DOS emulator, available on 46 high density disks for U.S. $138. In the U.S., the price was U.S. $1,000 and was, quite frankly, a great deal even at that price. In Hong Kong, it was literally a steal.

As I walked from shop to shop, I watched locals and foreigners queuing up. Business was booming, despite the Hong Kong government's assurances that piracy had been stopped. A year ago, there had been a crackdown of sorts. Then, you could buy your software at the flat rate of U.S. $2 per disk, but the goods had to be delivered to your hotel in a brown paper bag. Things were back to normal now, and you only had to wait for "copy a: b:" to complete its magic.

Going from stall to stall, I turned the corner to face a 3 by 9 foot stall called Macrosoft. It featured a sign that caught my attention: "Licensed Software Available Here." This was highly unusual. In fact, it was downright miraculous.

Crowded in this booth were three young men, several dozen PCs, and an attractive display of shrinkwrapped software. The specialty of the stall was "Booky," a three-pound computer with a 40 Mbyte drive and a 9 inch VGA monitor, all packaged in a box small enough to fit under an airplane seat. It was a desktop system, but the unit was smaller (and much more useful) than my DECnet book.

There was a bit of a language barrier, so I spent 10 minutes establishing the fact that I didn't want to make copies of their legitimate software. I wanted to know if they sold many copies, and they kept insisting that I couldn't make copies, sorry, please.

Finally, the boss, who couldn't have been more than 18 years old got off his mobile phone. We talked for a while, and I delicately brought up the fact that he was selling software for an order of magnitude more than his neighbors.

"Do you sell much software?" I asked.

A long pause.

"No," he said.

"Why don't you make copies like other stores?"

Another pause.

"Some things are right, some things are not."

As he said this, I noticed a beatific glow arising from him and realized that I was looking at one of the first computer engineers destined for sainthood.

Leaving the hallowed grounds of Macrosoft, I turned the corner to find myself at the administrative offices of the Golden Shopping Center. Inside, two very large men sat smoking cigarettes and drinking tea. Outside the office were posted the financial reports of the center, detailing gross rentals, overhead, and other items of interest to the pirates that ran the stalls. I took out my camera and started snapping pictures of the financial reports, feeling a bit like a spy.

As I was snapping the last picture, I noticed one of the secretaries who had come back from lunch, standing there and staring at me. She scurried inside, yelling something I couldn't understand (but could guess). It was evidently time to explore other areas, so I made myself as inconspicuous as a foreigner wearing a suit can be in such a situation. I felt a bit like a marketing executive trying to hide at an IETF meeting.

I then started my third pass through the center, looking at hard ware. This is always the most enjoyable part. I put my self righteousness aside, put away my investigative cloak, and became just another digital tourist.

The selection is not as unusual as in Japan, but the prices certainly were wonderful. This is the place to come if you are looking for the latest 486 motherboards, fax modems, cheap disk drives, or other components. My favorites are the little shops that sell commodities at good prices, perfect for people building clones.

One shop, for example, featured a box of XT motherboards for U.S. $12 each. Inside the store was every conceivable part from solenoids to keys to keyboards. Definitely the place to come if you wanted to make your own generic PC.

Leaving the bowels of the Golden Shopping Center, I decided it was time for a beer. I threaded my way through the noodle stands and incense vendors and bought a can of San Miguel in a nearby pharmacy.

I tried to sit at a table next to a noodle stand, but quickly discovered no noodle, no chair. I perched atop a crate of empty bottles and watched the vendors cut up chicken giblets and toss them over bowls of steaming noodles. It reminded me of when I lived in Bangkok, where I would have one of these bowls everyday for lunch.

Wearing my going-to-meeting clothes and sitting on a box furiously scribbling notes, I fit in about as well as an Elvis impersonator in the Senate Caucus Room, but I met the bemused stares of the noodle cooks with my own noncommittal look. Finishing my beer, I went back up Fuk Wing street, past the snake shop (great for soups) to the subway. One interesting attribute of the Sham Shui Po area, where the Golden Shopping Center is located, is its proximity to the Hong Kong airport landing pattern. As you walk along, it is not at all unusual to look up and see a Boeing 747 appear to be landing on the building in front of you.

I took the subway to Tsim Sha Tsui, right on the edge of the Kowloon side of the bay. It was still too early for my dinner appointment, so I strolled by the bay and watched dozens of boats scurrying about their business, then went to the lobby of the Peninsula Hotel to await my friends.

The Peninsula is one of those grand old hotels of the Orient. It is the kind of place that sends a Rolls Royce Silver Shadow to meet you at the airport and has the chauffeur phone ahead with your cocktail order so it is waiting for you when you alight.

The lobby is a place where you can nurse a gin and tonic (or a beer if you happen to be uncivilized) and watch the beautiful people act genteel. The thirty-foot ceiling is ornately decorated with golden ceiling ornaments, angels, and other remnants of the 1920s.

Going up to the concierge, I asked if I could borrow the display copy of "The Peninsula, Grand Old Lady of the Orient," explaining that I was a journalist and wished to include some information about his establishment in a story I was writing.

"Could I borrow the book for a few minutes for a story I'm working on? I'll be at that table right over there," I said, pointing three feet away.

"$160," he said without looking up. My journalist disguise evidently was not working.

Tuesday morning, my assignment was to meet Dr. Nam Ng (pronounced just as it looks), director of Hong Kong University's computer center. The university is one of six in Hong Kong and I had gotten Dr. Ng's name out of John Quarterman's classic guide for the digital tourist, The Matrix.

To get to Hong Kong University, you go up winding streets steep enough to make San Francisco look like Kansas. Not an inch of space is wasted in Hong Kong, a city with one of the highest population densities in the world and built on islands that are nothing more than the tops of submerged mountains. The university is no exception, carved into a hill that most countries would call a cliff.

After a 45-minute expedition from my hotel, I ended up spend ing only 20 minutes with Dr. Ng. Yes, they had a 9,600 bps BITNET link. No, they didn't connect to the Internet. The PCs were based on Novell's Netware.

All this was obviously useful to the students (the microcomputer labs were well equipped and full of intent-looking undergraduates), but this didn't fulfill my dual aims for the day: finding material worthy of a technical travelogue and reading my mail, which was accumulating at the rate of fifty messages per day back in Colorado.

It was still early in the day, so I called over to the Chinese University in the New Territories. I started with the operator, and after several false starts, ended up connected to Michael Chang, a lecturer in Information Engineering (lecturers are the equivalent of U.S. assistant and associate professors). He offered to let me dial in from Wanchai on the main island, but I didn't relish the idea of reading 200 messages at 2,400 bps on my prehistoric excuse for a notebook. Besides, I'd never been over to the New Territories, having confined myself on previous visits to Kowloon and Wanchai.

I tumbled down the hill from Hong Kong University, crossed under the bay on the MTR subway, and boarded a train for the New Territories. I passed the huge Shah Tin racetrack and got off at the stop for Chinese University. There, I took a shuttle bus up an even steeper hill, finally stopping at the Lady Shaw building, right across from the Run Run Shaw Building. I asked a couple of students on the bus who the Shaws were, but nobody seemed to know. (I found out later that Run Run Shaw produced kung fu movies and was the man who brought Bruce Lee to America.)

Michael Chang turned put to be young, competent, and very friendly. He ushered me into a room full of DECstations and PCs, and started up a guest account for me. As I plowed through my mail, I noticed students around me confidently working their way through the Internet, reconfiguring systems, and otherwise acting like normal undergraduates. I found out a little later over lunch that Chinese University had only received its Internet link two months previously.

After lunch, I crossed back over the bay to find Waleed Hanafi, Managing Director of Hutchison Mobile Data. Hong Kong has the highest concentration of mobile phones in the world. It is not surprising, therefore, that this is where the world's first public radio data network sprang up.

Waleed started the company, a subsidiary of the Hutchison conglomerate, in 1987, and by 1989 Hutchison had fielded its first net work. When Federal Express contracted with Hutchison for communication with its trucks, the network achieved a firm financial footing.

Hutchinson's network is based on 35 transmitters, strategically posted around Hong Kong using 20 different channels of the radio spectrum. The architecture of 20 channels and 35 stations allow expansion by stacking. In the financial district, one site already had two transmitter/receivers. There is no reason why 20 couldn't be stacked up at one site.

When a radio modem powers up, it checks the 20 different channels. Each transmitting site continually transmits a signal and the modem scans until it receives a signal with an acceptable bit error rate, set at the time I visited at 0 percent.

At that point, the modem sends a "here I am" message to the transmitter/receiver, which logs the unit ID. All units sharing a channel with a particular station use an arbitration scheme to decide when to send data. When the receiver is occupied, the transmitter sends a busy bit. When the channel clears (i.e., a modem is done sending a packet), the busy bit is dropped.

At this point, each modem backs off for a random period of time, then listens again. If the signal is still free, that modem gets to send. Otherwise, somebody else got the channel.

Collisions are theoretically possible, though highly unlikely be cause of the short packet transmission time. The key to this arbitration scheme is a very fast attack time by the modem–if the line is available after the backoff, the modem sends very quickly.

One thing that makes radio modems much simpler than cellular phones is the fact that handoff from one cell to another is not an issue. A packet is sent to one station. When necessary, the modem simply gives a "here I am" message to a new station, and the ID for the unit is moved. There is no need to keep a continuous circuit going as there would be for isochronous voice traffic.

Once a packet hits a transmitter/receiver, it is then routed into the Hutchison computer systems, which are simply two µVAX 3500s running the Ultrix operating system. The two µVAXen keep track of individual units and routed packets out to other sites. For example, Federal Express packets go back out via an X.25 link to the Federal Express host system.

A unit called a Develnet acts as a sort of LAN bridge, taking a radio packet and translating it into X.25, Ethernet, or Asynch-based formats. The Ethernet packets could go over a Hughes WAN bridge into a Novell LAN; the X.25 packets out over the Hong Kong public data network called Datapak, or even out via X.75 links from Hutchison's network to reach Sprint's X.25 network.

The biggest problem with a service like this is convincing people that it is worth using. "Great features" doesn't usually convince procurement agents. To spur demand, Hutchison took an 80386 and made it into a fancy BBS. Waleed founded the first Hong Kong BBS in 1982, so this was certainly a natural tack to take. The system on Hutchison's network links to several information sources, including weather servers and the Knight-Ridder news service.

Using your radio modem and a laptop, you could sit in your car and read the news wires. More importantly, in Hong Kong at least, you could check out stock prices.

One other link on the network which has proven quite popular is connection to the Royal Hong Kong Jockey Club's Telebet system. Customers hooking a CIT portable betting terminal up to a Hutchison radio modem can place bets from anywhere in Hong Kong.

For the outlying islands, this is often how bets are placed on race day. One old gentleman on the island of Ping Chau habitually sets up a unit next to the ferry depot. Islanders come to him to place their bets. At construction sites, the foreman often sits in a minivan and places bets on race days, thus keeping his crew from disappearing.

Mobile radio networks are big business. Hutchison is a world wide conglomerate and hopes to expand the data network into other countries. Hutchinson is putting a network into England and several other companies are putting in systems in other countries. In the U.S., IBM and Motorola have joined forces to put in the Ardis public data network. In Sweden, Ericson is putting its own Mobitex system in.

Although the service has potential, it is taking a while to get started with consumers. Hong Kong, with the high concentration of cellular phones and small area, is certainly an ideal place to start. Yet, even in Hong Kong, less than 1,000 radio modems are being used.

I left Waleed's office and took the subway back to Happy Valley. Actually, that's not quite true. I took the subway to the wrong stop, walked around lost for 30 minutes, and then, after asking directions several times, took a taxi to Happy Valley.

There, I strolled through the market past piles of smoked oysters, dried mushrooms, fish heads, and jackfruit, and finally parked myself on a stool at a duck stand. After a few minutes of pantomime, a cold beer was produced and I spent the next few hours eating duck giblets smothered in chili sauce and drinking San Miguel. The cooks couldn't figure out why I was scribbling frantic ally in a notebook, but decided after a while that anybody who liked duck innards couldn't be all bad.

One interesting thing I noticed, between bites of giblets, was that people would come in off the street and, without asking, pick up the phone and place a call. Hong Kong Telephone has a flat monthly fee throughout the islands, so it is not considered at all rude to just walk in and pick up a phone. Try that in your average New York deli.

An outgrowth of the flat fee has been some interesting value added services. Datapak, for example, offered a free ASCII-Fax service to its customers, since the marginal cost of doing so was zero. Flat-rate pricing, if properly designed, can be an ideal way to spur emerging industries. Commercial IP service providers in the U.S., for example, often used this strategy to encourage customers who might be scared of per-packet, per-hour, or other volume-based pricing schemes. Waleed Hanafi was using the same strategy to get his radio modem service off the ground.

Once an industry matures, more sophisticated pricing structures become possible. At first, however, customers don't have any idea what their use of a new service might be and don't want to assume the risk that their users might accumulate infinite service fees. Setting engineers loose on a volume-priced Internet is equivalent to leaving a dozen teenagers in a room with a list of 976 numbers posted next to the phone.

I finished my duck guts, drank up my last beer, and returned to my hotel.