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."

Comments

from the article

[strook]

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."

Call me a Socialist....

[deutschemonte]

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]

Re:Call me a Socialist....

[HBI]

Then the government is either going to have to lay the lines itself, or pay someone to do them. No one will do it on their own if they aren't going to own them.

Sitting here in 2004 with tons of unused fiber laid cross-country already, you may find it easy to say that, but when I was sitting there in 1994 wanting to get connectivity for 160 offices across the US, I was damn glad that wasn't the case.

Companies like the original WilTel (who were originally natural gas and oil providers who laid the fiber in the right-of-way of existing pipelines (SPRINT did the same thing with railroad right-of-ways) made it possible to have high speed digital connectivity at a time when the government regulated monopoly of RBOCs and their artifically drawn LATA boundaries made supposed 'public' lines completely unavailable. Yes, this all happened because of the AT&T breakup. Still, we'd be glad to have an ISDN connection right now if private industry hadn't filled the need.

Then again, you might be talking about the last mile, as the article was. Once again - why lay the infrastructure if you aren't going to own it? No one will. If you are going to wait for the government to do it, you are going to be waiting a long, long time.

The fundamental problem is that the existing copper local loop is 'good enough' to provide some access. Therefore, there is no drive for the government granted monopoly of local telephone providers - technically the owners of the local loop - to improve it. In this case, the granting of monopoly powers works against us - but it is still necessary to provide service on the local loop and at the CO.

There is no real solution to the problem that doesn't involve losing something. Pick 2 out of 3 - service, speed, low price. Most people aren't willing to compromise on #3 or #1, that's why you have shitty lines.