What Is Speculative Fiction?

So today part of my lunch conversation went something like this:

He: Where does the term "speculative fiction" come from?
Me: Well, we use it in my MFA program, and I think we used it at Clarion, too.
He: So do publishers know this term?
Me: I don't know. But writers do. There's specfic, litfic, kidfic.
He: What exactly is speculative fiction?
Me: Fiction that's not based in reality. Like science fiction, fantasy, horror, slipstream, magic realism.
He: So would the movie The Truman Show be speculative?
Me: No.
He: Why not?
Me: Because it's not. It's based in reality.
He: Is it?
Me: [silence-induced food coma from digesting yummy banana walnut coconut pancakes].

This is what I wanted to say, if I wasn't so incapacitated by my lunch:
Speculative fiction often implies a story set in a world whose rules stretch beyond the borders of reality, beyond what is possible given our technologies today. The premise of The Truman Show, while improbable, is definitely possible given our current technologies, as mini-camcorders nowadays are definitely tiny. The only thing reason why I think this movie might be speculative is because I do not believe that a corporation can legally buy a baby. But the rest of it (building a fake town populated with actors and mini-camcorders) could be very possible today.

As I am finishing this blog post, I discover that my Clarion classmate Damien has written a new definition of speculative fiction.