Broadband expands

In an email exchange with a journalist who covers networking and the net neutrality debate, I was asked whether we should treat the Internet similarly to the highway system or the original phone system. Using these common-carrier (“utility”) models, one could argue for both government regulation and direct government investment in broadband rollout. My response:

I will put a stake in the ground about legislating for the future, not for the past. [...]

It seems to me that most of the complaints about the current market, as well as the motivation in '96, are based on scarcity [or] lack of competition [...]

What is different now than when, say, the highways or the copper phone system were built, is that today the barriers to entry are much lower. [...]

A long time ago, perhaps only the federal government could build a large national infrastructure. I really don't see that being the case with bandwidth, and the burdens that come with a utility model should be avoided.

No sooner had I said that — well, OK it was yesterday — that we are presented with new evidence of healthy broadband expansion in the US.

News.com offers some new figures for fiber deployment, with over 600,000 new subscribers and 4 million homes with fiber available (the industry parlance is “homes passed”).

To help rural and low-density areas, California is sanctioning new testing for broadband over power lines.

Shall we continue? Om Malik summarizes: AT&T ups its DSL speed and adds half a million customers since the beginning of this year; Comcast adds a similar number. Add in SBC and that’s one million new broadband subscribers in last three months.

The net neutrality proponents argue that the network providers can’t simply be trusted to look out for the best interests of their customers. What these advocates need to understand that that is true for any business, from supermarkets to cars to PCs, and it has been so since the beginning of time. Every corporation is and has always been greedy.

History has made clear that the only truly progressive and permanent way of protecting consumers is to allow a competitive market to freely develop. Regulated markets — think California utilities — have little incentive to improve their infrastructure. When demand peaks, we end up with scarcity (rolling blackouts) or bad service (PG&E once asked me to wait at my house for 8 hours until they could probe a gas leak).

As Mark Cuban has pointed out, scarcity on the Internet is coming unless the network providers are rewarded, in innovative ways, for building big new bandwidth. We tend to think it’s an infinite resource, but it’s not. It is our imaginations that are infinite — let’s allow the network to keep pace.

Back in the day, say the mid-80’s, it could be said that we had a monopoly situation in the communications market, which consisted mostly of copper wires. Those days are long gone, as “communications” has exploded, both in the number of competitors and the variety of their offerings.

It’s blooming right now, folks. Let’s not get in the way.

Cross-posted at California Conservative

Comments

[directorblue]

We're down to two telephone companies and a handful of cable companies. Most consumers in the US have zero, one or two (at most) choices for broadband into their home.

Yes, the market for last-mile services _would_ be competitive every day had the unreformed monopolists not spent all their time and money fighting municipal wi-fi or, for that matter, spending more on R&D than on lobbyists.

In fact, the telcos have spent every ounce of energy in reducing choice (even down to fighting the city of New Orleans over WiFi during the rebuilding after Katrina).

And, this is, despite the attempts to portray it as such, not a Democrat vs. GOP issue. It is a Democracy vs. Communism issue. Do we want the Internet of today with all its diversity and value-creation? Or do we want a change dictated by the telcos?

Plenty of conservatives -- from the Gun Owners of America, to Right Wing News, Instapundit, etc. -- support net neutrality. And more are joining the cause every day.

You can read some background material here: http://directorblue.blogspot.com/2006/02/end-of-internet-another-fantastic-deal.html and take action here: http://www.savetheinternet.com

Even now, without network neutrality, investment in net startups has chilled: Blair Levin, analyst with Stifel Nicolaus said, "Right now, I would never invest in a business model that depended on protection from Net neutrality."

So who will fund the next Vonage, Skype, or Google?

And please tell me: what great, value-creating businesses have the telcos helped fund or create (such as Vonage, Skype, eBay, or Google)?

The current state of the Internet -- the one that has resulted in such immense value creation -- is network neutrality. What the telcos are supporting is the extermination of neutrality and neutering of the FCC's ability to enforce it.

That is why Bob Kahn (inventor of TCP/IP), Vint Cerf, and Tim Berners-Lee (inventor of the web) all favor network neutrality. But I guess you and the lobbyists know more about the network then they do.

America's leadership in Internet innovation hangs in the balance. Go to http://www.savetheinternet.com and take action.

[Matt S]

Wow, director, what do you think communism is? I had a look at your blog and clearly you're more right than left, but what are you talking about?

Gov't control of resources in the basis of communism. Are you arguing for more government control or less? Be clear.

Oh, and do make your own argument. Please don't drop names and repeat someone else's.

It is not "plenty" of conservatives my friend, it is a small handful. There are probably 10x as many liberals arguing for this, which is not surprising. The tokenism is hilarious.