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George Gilder on Telecommunications Policy
Codeine writes "The Testimony of Mr. George Gilder to the Telecommunications Policy: A Look Ahead hearing held by the US Senate Committee on Commerce, Science, and Transportation strongly supports the idea [of] mandated 'open access' to the logical layers of the network, and it is embodied in a new legislative proposal by MCI, A Horizontal Leap Forward: Formulating a New Public Policy Framework Based on the Network Layers Model. The success of the layered model in the LAN environment, migrated to the WAN."
The U.S. now ranks eleventh internationally in residential "broadband" access. Using the FCC's silly 200-kilobit-per-second definition, some now say that 25 percent of American homes have broadband. But by the standards of Asia--where most citizens enjoy access speeds 10 times faster than our fastest links--U.S. residences have no broadband at all.
Hi, I'm Mr. George Gilder. You may remember me from such other testimonies as "Manipulating data" and "Obfuscating statistics."
I would like to inform you that ubuiquity of broadband is in no way related to population density.
Gentlement, I thank you for your time.
An effective signature identifies a particular user amongst a base of thousands.
Ideas such as defined network layers, APIs, etc. offer a happy medium between proprietary and open development. The APIs become open to the public allowing different companies to integrate in an existing framework. It seems to me the ideal world would have elements of different approaches to life. Rather than OSS having to push all proprietary software out of existence through a viral legal model, or a monopoly controlling the computer horizontally from OS to Office Suite, a structured layer model could create a working ground for both models.
Too long and dense, here's a summary.
The basic theme is, America is supposed to be the home of everything great. Our vice president invented the internet for christ's sake. So why don't we have the best access for consumers?
"The U.S. now ranks eleventh internationally in residential "broadband" access. Using the FCC's silly 200-kilobit-per-second definition, some now say that 25 percent of American homes have broadband. But by the standards of Asia--where most citizens enjoy access speeds 10 times faster than our fastest links--U.S. residences have no broadband at all. U.S. businesses have far less broadband than South Korean residences. South Korea, for instance, has 40 times the per capita bandwidth of the U.S. Japan is close behind Korea, and countries from China to Italy are removing obstacles to the deployment of vDSL, fiber-to-the-home, and broadband wireless networks."
Gilder thinks our government's mucking things up:
"The Telecom Act of 1996... turned into a million-word re-regulation of the industry. Regulatory actions by the FCC and the 51 state utility commissions greatly exacerbated the bad parts of the Act and distorted many of the good parts."
MCI has a new proposal: "A horizontal layers approach would supposedly be a radical shift from the "vertical silos" approach now used, where telephony, cable, and wireless, for example, are regulated based on historical industry definitions, not generic functional categories. The common denominator of Internet Protocol (IP)--supposedly the basis for all future communications networks--is said to necessitate the new layered regulatory approach."
Gilder doesn't think reregulation is going to help, and poses some interesting questions: "Should Google be able to leverage search into Gmail, or to supply content using its proprietary algorithms and its physical network of 100,000 servers? Shouldn't any rival search provider be able to feed off of Google's advanced infrastructure? After all, wouldn't it be impossible to recreate Google's massive web of global intelligence? Doesn't Google's superior infrastructure exhibit "market power"? Might Google actually evolve into a general provider of web-based information management services, rivaling the PC-based Microsoft, or should Google be "quarantined" as a search provider? Or maybe we should structurally separate Google into three companies: an infrastructure provider (its 100,000 networked servers plus algorithmic IP), a content/advertising company, and an information services company (Gmail plus future knowledge management applications). Surely FCC bureaucrats can make these easy distinctions and explain the resulting penalties to weary entrepreneurs who have just spent 10 years of their life building a new service that people really like."
His conclusion: "The real threat to monopolize and paralyze the Internet is not the communications industry and its suppliers, but the premature modularizers and commoditizers, the proponents of the dream of some final government solution for the uncertainties of all life and commerce."
"TV is great! Every New Year's I make a resolution to watch more TV." - Ann Coulter
But I have always believed that the people should own the infrastructure that companies do business on.
Other than toll roads, we don't allow companies to own our public streets and then mandate to us who gets to use them to conduct business.
If the people (i.e. the government) owned the data infrastructure that telecoms do business on, it would allow for more competition because smaller companies could compete over the same lines without biased interferance from the owners of the lines.
In fact it would drive down the cost of the lines because the governmental authority over them would charge each company a fee to have access plus a usage charge. Total usage fees would remain the same no matter how many carriers compete for the same population, but the access charge income would rise with each carrier that entered the market.
[/soap box speach]
The preceding message was based on actual events. Only the names, locations and events have been changed.
This guy actually wants to let people lock in "content", and it sounds to me like DRM is perfectly fine with him as well.
What a putz!
--Mike--
George Gilder seems to have succeeded solely on the basis of his belief in his own power as a prophet of the future. As those who subscribed to his stock market newsletter found, he was a legend in his own mind, not in reality.
George Gilder was a largely unknown hack author of little read books that many would regard as sexist before he wrote Wealth and Poverty which caught on with the Reagan administration believers in "supply side" economics (we know this today as the economics of tax cuts and massive federal budget deficts). Although "supply side" economics has returned, it was largely out of favor with the administration of Bush Sr. and the balanced budget faction of the Clinton administration. So Gilder reinvented himself as a technology guru. The fact that he has no background what-so-ever in science or technology did not stop him. He interviewed those who did and wrote up his impressions in breathless terms.
The peak of Gilder's trajectory was his stock market newsletter which had thousands of subscribers who were willing to pay thousands of dollars for the privilege of reading the thoughts of the master. This and the opportunity to get early access to Gilder's hype which was moving the market in many cases.
Then there was the fall. As the 2000 stock market crash erased the value of many of the stocks that Gilder touted, his subscribers deserted him in droves, much poorer for the experience. Gilder had invested in the stocks that he hyped and his investments were largely wiped out. Gilder was also making money holding conferences and was left with conference committements and no attendees. In the end he was heavily in debt, his bubble wealth wiped out.
But true ego maniacs and pundits never die. They just continue the process of reinvention, whether as Governor of California or as an expert in telecommunications. So here we see Gilder again blowing hot air on topics that he has a shallow understanding of. And, as always, coloring his presentation with the usual Republican freemarket ideology (regulation bad, taxes bad, poor people weak and shiftless, unrestained free market good, rich people good).
That's higher than cable TV ever reached. Cable TV has been stuck at roughly 65% for many years. And it's way above book and newspaper penetration. Far more people have Internet access than buy books. Newspaper penetration is down to 55% or so, and has dropped about 10% per decade since 1950.
Remember, the US has flat rate local phone service, but many other countries don't. So dialup access was and is cheap to buy.
So this isn't a problem.
As for the "layering" business, we've had that ever since telephone deregulation. You can buy bulk bandwidth cheaply if you can get it to your site, or go to where it terminates. Look how little bandwidth costs for a colo server. Bulk long-haul bandwidth is incredibly cheap.
I live about 30 miles away from New York City and still can not get any wire-DSL, wireless local-loop or Fixed Position Wireless (Google the phrases), ... why be forced to share the cable. Data is data; So, why not have three or more companies that are able to provide all services (phone, HDTV, data, internet, ...) and content that I/you select/want and just one bill for $100 or less a month. I'll pick my provider and keep them as long as they keep me happy for a good price.
... providing a real performance incentive and dynamic Capitalist "Open Market" is the way to go. Any law that mandates control/protection of sectors (special interest) in technology, customer base, media/content, ... is a big-bad mistake for economic development and the citizens of a nation. Let performance, total-cost (environment, health, welfare, ...), and customer satisfaction rule the market.
....
"Building a new service that people really like." OR "The real threat to monopolize and paralyze the Internet is not the communications industry and its suppliers, but the premature modularizers and commoditizers, the proponents of the dream of some final government solution for the uncertainties of all life and commerce."
Open standards, technology, innovation, laws, concepts,
Allowing special/proprietary interest to control the market and customer is Un-American, Communistic, and anti-capitalist, everything many of US are against, unless you're a rhetoric and dogma hog like many politicians and fools. Bad businesses must fail, file bankruptcy, and pass into history. Just as that HP CEO said no USA worker should have a god given right to a job, I say no business/CEO should have a Government granted right to market share and/or customer base. We should never protect any market sector or customer base for corporate welfare and customer exploitation as we have been doing by laws for special interest during the last 30 years (at least). It will just promote more enrons for US. Act in the customers interest with laws that allow and promote choices, freedoms, options,
OldHawk777
Unaccountable leaders are masters, and unrepresented people are slaves. How do US and EU fare?
The original post is wrong. It implies that Gilder supports the MCI position. But Gilder's testimony opposes it. Gilder is, like many extreme right-wingers, a fan of unregulated monopolies. He does not believe that monopolies should be regulated; he thinks that technology will magically render them powerless. His record in picking technology investments, however, is rather spotty, to be charitable.
In Gilder's world, the incumbent telephone companies, who had government-granted monopolies, should be allowed to have total control over their usage and content. No competing ISPs, no uncensored web sites, no competing web merchants, if that's what the monopoly wants. If they want to charge $100/month plus $5/hour for dial-up access, fine. Anything else is, to him, excessive government regulation. He'd permit somebody else, of course, to string new wires on the street, but the impracticality of that is not his problem.
He should be relegated to the dumpster of other failed nut case prophets, and left with his fellow creationists to ponder the problems of a world where scientists and rational thinkers are allowed to question his faith.