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They kept the 200 billion we gave them

Are you sure it's 200 billion? The author you cite seems to have thought it was $30 billion. Wait, no, it was $200 billion. Ah, sorry, now it's $300 billion. Maybe it's inflation?

Not saying that the American public wasn't shortchanged by the Baby Bells - back in the day when they actually existed, I never encountered a more anticompetitive group of oligarchists in all my career. But let's not necessarily keep repeating this "OMG telcos stole $200 billion" meme without a little more quantification and justification.

United States: 80 people per square mile.

South Korea: 1,274 people per square mile.

This is an old, tired argument. Sure, North Korea is more densely populated. The Netherlands too. But the density does not really say it all, it's just an average. My dad got top marks in his course in statistics, and he went on all his life pontificating about the "chicken average": I eat two chickens, you eat none, on average we ate one each". There are surely immense areas of the US without broadband (like Yellowstone park, say), but what about areas as dense as NYC?

The question is better put as: how many Americans live in high-density areas? Quite a few. The overall density is low because there is a damn half of the country that is uninhabited, and that's before counting in Alaska.

This is the canonical link to the issue: http://isen.com/stupid.html

In short, your communication line is no more than infrastructure -- and no less. The argument that competition can somehow spring forth out of the last mile is based upon the fallacy that someone will string a whole new set of lines to homes. Verizon would argue that they alone own the telephone poles (they do not) and tie up the whole mess in the court system. Or that someone could blanket the nation with fixed wireless (Project Angel of AT&T); of course, the only entity that could it effectively is a local gov't and Verizon blocked that as well.

Someone mentioned corporations act in their best interests, and that is true. As citizens -- because after all corporations are considered entities somewhat like people -- corporations would be psychotic sociopaths who in all honesty would be sentenced to life in a mental institution.

Expecting these entities to act fairly is itself stupid. The only way to deal with them is harshly and unfairly, on the side of people and not the corporate interest. We know how that goes, too.

Net neutrality is something we absolutely must have, not just as Americans but as free people. No corporate interest should take precedence, ever, for any reason. If they cry poverty, so be it. Let them find another way to make money. Really, if we pushed them hard enough, what could they really do?

-BA

The telcos actually tried to implement a layered architecture for differentiated services in the 1980's and '90s - it was called the Advanced Intelligent Network and was being rolled out in stages along with a last mile interface stacks known as ISDN ("it still does nothing"), and eventually B-ISDN (broadband ISDN, or "basically, it still does nothing").

Then usage of the Internet began growing exponentially, and we stopped hearing much about AIN, although it's out there taking care of 800-number lookups and a few things like that on expensive, synchronous mode, mainframe-like switch hardware and software sold by Northern Telecom and Lucent. But we still needed a separate phone network to handle phone service (and business videoconferencing, etc.) with acceptable quality and robustness, or so thought the telco executives. A senior engineer at Bell Labs named David Isenberg decided to take a closer look at the two approaches and had an epiphany - all the economics were in favor of the open, decentralized IP approach, where service innovation occurred at the endpoints via the free market mechanism, rather than the monolithic architecture and business model where the monopolist providers controlled the rollout and pricing of new features (sound familiar?). His paper The Rise of the Stupid Network is a considered a classic, and he now blogs as an independent consultant. Once you read his "stupid network" paper, his position on net neutrality will not be a surprise.

How much is that PBX in the window? ok, so Id like an SS-7 switching network, and I aint a phone company, oh? cant have one? have to run my own wires? hmm...

Separating control from data only makes sense if the network is smart. Smart networks only make sense if the manager of the network is your friend. Usually, that is not the case for anyone except the phone company. The whole point of IP is to make the intermediate network a non-issue. make it stupid so that there isnt any value there, and it can be replaced by any number of technologies or providers. That is always going to be cheaper for end users, but not the phone company.

backgrounders:

• The Rise of the Stupid Network
• BellHeads vs. NetHeads

• 9.17% of your bits are belong to us!
  
• Does this just mean an extra sales-like tax on buying LAN equipment, e.g. 9.17% on the $29 hub I bought, and maybe 9.17% of the $10 of CAT-5 cable I bought? That means that they need to go bug Radio Shack into being aware of extra taxes to collect at point of sale.
  
• Some articles implied that it included taxing 9.17% on the depreciation that businesses take on their capital expenditures for equipment, or on the expenses they charge if they expense the cost. But homeowners don't do that kind of accounting, so that's 9.17% of Zero.
  
• If it does cover the expense or depreciation cost of LAN equipment, does it also cover the cost of installation labor? Or just parts?
  
• If you installed wiring for one purpose, and reuse it for something different, does that suddenly make it taxable or non-taxable?
  
• Does the tax cover wireless equipment? Cordless phones? Cordless PBXs? Cell phones? What if the cell phone was free if you bought the service plan?
  
• Isenberg's famous paper "The Stupid Network" advocates network architectures that are stupid in the middle and smart at the edges. Obviously a tax on "stupid networks" is a "stupid tax", and, like the lottery, this is also a real stupid tax.
  

Kushnick presents an example of how in 1993, New Jersey Bell convinced the New Jersey Public Utilities Commission to institute new, "incentive based" rate rules. In return, NJ Bell promised to spend US$1.5 billion to "greatly accelerate deployment of advanced technologies," including fiber to the home. In 1997, the New Jersey Ratepayer Advocate (a NJ State Official) reported that NJ Bell spent not $1.5 billion but only $79 million. At the same time, Kushnick reports, the new regulatory "incentives" gave NJ Bell a $955 million windfall that resulted not in advanced services, but in $1 additional dividend payouts of -- surprise! -- about $955 million. And -- more surprise! -- no New Jersey homes got "advanced technologies" under the "incentive based" system. It was all quid, and no pro quo.

These incumbent telcos are obsolete

Appropriately modded IMHO. Read The Stupid Network.