Roll the tape.... from Tuesday:
...I would be wary of a government managed plan for universal broadband access. My fear would be that they would adopt a 20th century solution to a 21st century problem.
Broadband technology (particularly the new wireless broadband) is still evolving. Once you make it a government program, you introduce a lot of rigidity. Better to keep some flexibility until we see which technology is superior. We can, I believe, afford to do that in this case because wireless is a low fixed cost operation compared to high fixed cost utilities such as the electrical grid, the copper wire laid down by Ma Bell, and even cable TV. There will be competition just as there is for wireless phone service--speaking of an industry that went from high class luxury to practically universal access in about a decade.
Friday's Wall Street Journal editorial has this to say:
Much of this [telecommunications sector] growth has been fueled by increased broadband deployment, which makes high-speed Internet services possible. The latest government data show that broadband connections increased by 26% in the first six months of 2006 and by 52% for the full year ending in June 2006.
Also noteworthy, notes telecom analyst Scott Cleland of the Precursor Group, is that of the 11 million broadband additions in the first half of last year, 15% were cable modems, 23% were digital-subscriber lines (DSL) and 58% were of the wireless variety. Between June 2005 and June 2006, wireless broadband subscriptions grew to 11 million from 380,000.
This gives the lie to claims that some sort of cable/DSL duopoly has hampered competition among broadband providers and limited consumer options. That's the charge of those who want "network neutrality" rules that would allow the government to dictate what companies like Verizon and AT&T can charge users of their networks. But the reality is that the telecom industry has taken advantage of this deregulatory environment to provide consumers with more choices at lower prices. Verizon's capital investments since 2000 exceed $100 billion, and such competitors as Cingular, T-Mobile and Sprint are following suit. So are the cable companies.
Memo to Congress: Don't mess this up.
Who do you think provides wireless? And what competitors are out there that don't have the security of a regulated monopoly base?
At the retail level there are a number of competitors. Yes, most of them probably lease bandwidth from the major companies (e.g. Verizon), but they lease in bulk which gives them a bit of bargaining power.
It is these small startups that, by growing a customer base, lead the big companies to invest in more pipe for those areas. At the retail level, they are anything but secure.
Full disclosure: My home internet connection is from a small startup wireless ISP. Their price is competitive, and their service is excellent.
What is screwed up, here, is that the powers-that-be have tied new technology to old.
Sunk cost investments in old technologies, by rights, ought to be abandoned, wholesale, Instead, we have jerry-rigged technologies like ADSL, which have significant limitations and high costs. Political manuvering prevents municipalities from either founding municipal utilities or granting franchise rights to private companies, which do have a mountain of debt tied to now worthless sunk cost investments in obsolete technology.
Libertarians, always the champions of new forms authoritarianism, will fight "network neutrality" and cheer on the dinosaurs, like AT&T and Verizon, as they procrastinate their way to technology followership.
Next week: how draconian intellectual property legislation is incentivizing Disney, Viacom and other creative geniuses to product vastly more and better culture.
A while ago there was discussion about how the ISPs were trying the hijack the Googles of the world(Net Neutrality). I thought they were a bunch of dumbys to think they could run roughshod over a bunch of smart well financed kids. Google has instlled a wireless system just down the road in Mountain View and I am thinking of puting a high gain antenna on a mast and seeing if I can get on. If so it would be by by pacbell/sbc/att.