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Krugman On the Connectivity Power Shift
In today's NYTimes (registration required), Paul Krugman's op-ed piece lays out in simple terms the statistical power shift in the online economy among Europe, Japan, and the US. This shift has been discussed here for some time, but it's good to see it coming to the attention of a wider audience. Quoting: "As recently as 2001, the percentage of the population with high-speed access in Japan and Germany was only half that in the United States. In France it was less than a quarter. By the end of 2006, however, all three countries had more broadband subscribers per 100 people than we did... [W]hen the Bush administration put Michael Powell in charge of the FCC, the digital robber barons were basically set free to do whatever they liked. As a result, there's little competition in U.S. broadband — if you're lucky, you have a choice between the services offered by the local cable monopoly and the local phone monopoly. The price is high and the service is poor, but there's nowhere else to go."
The price is high and the service is poor, but there's nowhere else to go.
How about Europe or Japan?Another problem is that the population of the United States is much more stretched out than in those other countries (especially, duh, Japan) and therefore harder to physically reach. It's easy to reach the 50% of the population nearest the population centers, harder to reach the 50% that's farther away.
It's like the problem we had in the US of upgrading television stations to Hi-Def. In Europe, you only have to upgrade two or three transmitters per country. In the US you have hundreds of transmitters dotted throughout the country (not to mention the added trickiness of local ownership of individual local television stations)...
"Flag on the moon. How did it get there?"
I live in a building where the developers contracted in a "triple-play" provider. Phone, internet and television are all provided by the one company, and poorly at that. We have zero competition to choose from, and only last week at the body corporate meeting did we (the resident owners who bothered to turn up) manage to reach an agreement that the monopoly situation was of no benefit to the residents nor the owners.
Dan. -- So what if it's spelt wrong, nobody's perfect
I was in France last year for a few months, and I believe there were triple-play services (Internet, Phone, and TV) being offered for around EUR 30 / month. Internet telephony is a pretty common offering there; there are lots of land-line plans you can get that offer unlimited calling to certain overseas regions (North America, for example) using it.
"Anyone who [rips a CD] is probably engaging in copyright infringement." - David O. Carson
Knowledgeable masses are scary to politicians of any stripe. Period. Liberals are just as afraid of an educated, emancipated population as the conservatives, and for the same reason: it's harder to get elected/re-elected on a platform of unadulterated bullshit when the people have the mental tools to see right through you. Twisted statistics don't work well on people who can handle numbers, for one, and citizens with a broad knowledge of world history don't get taken in as easily either.
The higher the technology, the sharper that two-edged sword.
There will never be real competition because it is usually only profitable for one company to service a municipality at a time. If another did move in and they shared the customers one would go under. I know for a fact cities in Ohio are not allowed to exclude any competitors, and that was before this legislation was passed (do you have a link?). If any company wants to offer cable, they must negotiate the terms with the local government in order to use their rights-of-way. In light of that, guess how many cities have more than one cable company serving them. AFAIK, none.
People used to complain to my peers and me on the cable advisory board that we shouldn't be giving Time Warner a monopoly over cable service. We showed them the laws on the subject. Anyone is free to offer cable service, it's just that no one wants to once there is an established player in town.
Every time somebody trots out this lame excuse I will persist in pointing out that in bucolic Ephrata, Washinton - the middle of nowhere on the road to nowhere - they have gigabit broadband. That's fiber to the premises and gigabit Ethernet to the house, a symmetrical unmetered gigabit link to each subscriber, for less than I pay to Comcast each month.
They get it through their power company and they're grandfathered in but I can't get that deal because the big players bought legislation prohibiting municipal broadband.
So stop already with the story that the last mile is expensive, bandwidth is costly, density is the key lies already. It's about the incumbent monopolies maintaining their profits at the cost of depriving the average citizen of necessary infrastructure full stop.
Help stamp out iliturcy.
What a load of bull. Just because we started rolling out the technology first doesn't mean a single thing at all as to whether we continue rolling out an "older" technology to areas that do not have ANYTHING in them at all. That decision was made by the same people who are in control of the networks as to if they would spend more to use more up-to-date technology or to use the cheaper more readily available technology. Also do not forget that Japan has not been far behind us from the beginning in terms of rolling out the technology, however, they have been actively ripping out the older stuff and upgrading to the new stuff all the time, unlike our infrastructure which will only "upgrade" when something fails and they realize they can't purchase the same piece of equipment anymore to replace it. Verizon is the only one over here that seems to actually be upgrading their infrastructure, however, they also lock the customer out of any kind of competition for the privilege of using their new service (i.e. they remove the copper land lines to your house, which you will then have to pay to have put back in if you want to switch phone services in the future, even though it costs Verizon time and money to remove the old line, they are using that as a way to deter people from going to a competitor, by making the customer spend upwards of $200-400 in line fees, which is enough to keep the customer from deciding to go to a competitor who would save them an extra $5-$10 a month... and thus allow Verizon to over-charge by that much more because it will cost the customer more to go to another competitor in up-front costs then it would be worth the savings). Again, anti-competitive lock-ins.
The US lags behind because the FCC allows the big industry to do what they want. Heck, we are almost completely back to AT&T and ONLY AT&T in terms of telephone service. The 1982 split that was a part of a lawsuit settlement from the government against AT&T was what allowed AT&T to get into the internet business in the first place. AT&T agreed to split into 7 new companies (plus AT&T), and would be allowed to start developing data network services which is what led to access to the internet for normal businesses and then people at their homes. SBC was formed from Ameritech, Southwest Bell, and Pacific Telesis. SBC then aquirred AT&T itself and BellSouth, and renamed themselves back to AT&T (as that had the more important name, since it had been around since 1883 and was the ORIGINAL telephone company of all telephone companies). So of the 8 companies that AT&T was split into, 5 of them have been merged back together. The other 3 are now down to just two, Verizon and QWest. So in the landmark 1982 settlement that allowed the phone company (AT&T) to get into the internet service business, they are now just three. The Supreme Court settled with AT&T with the stipulation that it was going to be 8 companies that controlled the infrastructure. There was a reason for that because there would be enough companies out there that it would be difficult for them to all collude together and over-charge the customers, because someone would always say, "We can make more net money by cutting our profit margin down lower then the other companies and taking a large portion of their customers". Whereas now, with only three companies, it is easy for them to say, "We can make a LOT more money by steadily increasing the fees and rates we charge, so long as the other two guys see what we are doing and do the same thing, because it will only benefit them as much as it benefits us".
We were all warned a long time ago that MS products sucked, remember the Magic 8 Ball said, "Outlook not so good"
That seems like a reasonable arguement but if that were the case then with the massive housing boom we have been in for the past 10 years we should have a significant number of homes with the latest fiber optic last mile technology, but guess what, we dont.
I've watched thousands of houses go up and hundreds of new neighborhoods, and whats going in the ground you ask, the same coax and twisted pair copper they've been using for the past 30+ years.
And when people get fed up and try to band together to build there own fiber optic network because the digital robber barons refuse to invest in the latest technology do we finally get the latest technology, no we get lawyers and lobbying to turn citizens into criminals and outlaws.
And now with our pathetic outdated infrastructure that provides limited broadband at high prices what are the robber barons trying to do, drop their requirements for network neutrality and charge us and content providers even more for what we've already paid for.
Its not distance or age, its plain and simple greed and governmental complicity with illegal monpolization of markets. This country is getting passed by in the name of capitalism for the few and screw the other half.
I have a friend who lives up in California and has a bunch of people working out of his house because his home internet connection is somehow 50mbps per second because the place was setup as some ultra high speed trial a few years back. He'd like to get all his employees out of his living room but he can't because he can't find a single commercial building with comparable broadband speeds without going to an absurdly priced OC3. Just goes to show that as William Gibson has said, "The future is here, it's just not widely distributed yet".
Krugman is actually quite the economist. His text, "Economics," written by him and Robin Wells is used in many universities in introductory courses (it's the number two text, I believe, after the venerable Samuelson), and his text "International Economics," written by him and Maurice Obstfeld is in it's ninth edition. He's a Professor of Economics and International Affairs at the Woodrow Wilson School at Princeton and has had numerous publications during his career, including 38 books. He also was the winner of the American Economics Association's John Bates Clark Medal in 1991 and is considered one of the country's foremost neo-Keynesian economists. As such, I'm fairly sure he has enough fact checkers at his disposal to make sure that his figures and conceptual grounding is much better than yours. You may not believe him or agree with his politics, but he is certainly not a "fruit".
That is all.
The reason why germany got so many broadband connections is rather simple. It's way cheaper to have broadband here than dial-up.
Traditionally you had to pay for every single phonecall, even local ones. So dialing-in into an ISP _really_ cost you a lot of money. In fact back then most ISPs didn't charge you for their services so you only had to pay to your local phone company.
Then with DSL and cable modems you suddenly got a flat-rate for a moderately low price.
Currently the costs are about this: (all in Euro)
dial-up 0.1 cents/minute => 43.2 Euro a month (wow, this suddenly even became affordable)
DSL is about 50 Euros a month including an ISDN phone-line with flat-rate service for data-calls for all of germany.
Dial-up used to be even more expensive, costing as much as 3 cents per minute.
This is proof it's possible if those in charge have foresight, plan well, do it right, and don't give in to the pressure of the industry giants who'll try to stop them. Perhaps we should expect more from our
If I mod you up, it doesn't necessarily mean I agree with what you've said, sorry.
Here you go, enjoy. And enjoy the coming take-down notice, /.!
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There was a time when everyone thought that the Europeans and the Japanese were better at business than we were. In the early 1990s airport bookstores were full of volumes with samurai warriors on their covers, promising to teach you the secrets of Japanese business success. Lester Thurow's 1992 book, ''Head to Head: The Coming Economic Battle Among Japan, Europe and America,'' which spent more than six months on the Times best-seller list, predicted that Europe would win.
Then it all changed, and American despondency turned into triumphalism. Partly this was because the Clinton boom contrasted so sharply with Europe's slow growth and Japan's decade-long slump. Above all, however, our new confidence reflected the rise of the Internet. Jacques Chirac complained that the Internet was an ''Anglo-Saxon network,'' and he had a point -- France, like most of Europe except Scandinavia, lagged far behind the U.S. when it came to getting online.
What most Americans probably don't know is that over the last few years the situation has totally reversed. As the Internet has evolved -- in particular, as dial-up has given way to broadband connections using DSL, cable and other high-speed links -- it's the United States that has fallen behind.
The numbers are startling. As recently as 2001, the percentage of the population with high-speed access in Japan and Germany was only half that in the United States. In France it was less than a quarter. By the end of 2006, however, all three countries had more broadband subscribers per 100 people than we did.
Even more striking is the fact that our ''high speed'' connections are painfully slow by other countries' standards. According to the Information Technology and Innovation Foundation, French broadband connections are, on average, more than three times as fast as ours. Japanese connections are a dozen times faster. Oh, and access is much cheaper in both countries than it is here.
As a result, we're lagging in new applications of the Internet that depend on high speed. France leads the world in the number of subscribers to Internet TV; the United States isn't even in the top 10.
What happened to America's Internet lead? Bad policy. Specifically, the United States made the same mistake in Internet policy that California made in energy policy: it forgot -- or was persuaded by special interests to ignore -- the reality that sometimes you can't have effective market competition without effective regulation.
You see, the world may look flat once you're in cyberspace -- but to get there you need to go through a narrow passageway, down your phone line or down your TV cable. And if the companies controlling these passageways can behave like the robber barons of yore, levying whatever tolls they like on those who pass by, commerce suffers.
America's Internet flourished in the dial-up era because federal regulators didn't let that happen -- they forced local phone companies to act as common carriers, allowing competing service providers to use their lines. Clinton administration officials, including Al Gore and Reed Hundt, the chairman of the Federal Communications Commission, tried to ensure that this open competition would continue -- but the telecommunications giants sabotaged their efforts, while The Wall Street Journal's editorial page ridiculed them as people with the minds of French bureaucrats.
And when the Bush administration put Michael Powell in charge of the F.C.C., the digital robber barons were basically set free to do whatever they liked. As a result, there's little competition in U.S. broadband -- if you're lucky, you have a choice between the services offered by the local cable monopoly and the local phone monopoly. The price is high and the service is poor, but there's nowhere else to go.
Meanwhile, as a recent article in Business Week explains, the real French bureaucrats used judicious regulation to promote competiti
Hideho, American expat in rural Japan here. Its been ages in Internet time since I've paid for a US connection, so lets compare notes:
I get high speed internet through YahooBB (ADSL), which is now run by Softbank. I pay 4200 yen a month (~$34 at present) for 50 MB/s download speed, which is oversold (bounces between 2 MB/s and 12 MB/s when connecting to sites where I could reasonably expect to get the full benefit, such as iTunes Japan or the WoW bittorrent installer). This includes the basic charge for VoIP phone service but no call time (which is cheap -- 3 cents a minute to the US) and equipment rental (the modem -- should have bought it, would have paid for itself around month 18). I also pay approximately 1800 yen for basic telephone service, a necessary prerequisite for ADSL unless you want your VoIP phone to not be reachable by non-VoIP customers ("uh oh"). There is also the issue of buying a lease for a landline, which is a one time charge of $100 but which theoretically has the same resale value so we'll ignore that for the present.
So, all told, about $50 for high speed service which consistently delivers 2 to 12 MB/s.
What does $50 get in the US these days?
Help poke pirates in the eyepatch, arr.
An interesting anagram of "BANACH TARSKI" is "BANACH TARSKI BANACH TARSKI"
Well, yes and no.
1. Densities per whole state can be a bit misleading, because the USA has a ton of farmland or just empty space. The communities you need to connect (first) tend to be a bit more concentrated. Even if you take Montana as an example, I'm willing to bet that even the villages there have a bit more than 2.39 people per square kilometer. (Unless they're all hermits.)
By comparison, western Europe simply has less empty space to screw up the maths. For example, North Rhine-Westphalia (the heavily industrialized county in the NW of Germany) is almost one contiguous megalopolis spread across a whole state. Not exactly, but almost. You only know that, say, Düsseldorf (land capital city) ended and Duisburg ('nother city next to it) started only because the shields on the highway say so. There's just not that much empty space to screw up the maths.
2. If population spread was the real problem, then in the USA the major cities should all be on Ethernet, which AFAIK isn't the case. I mean, high population density = good for broadband, right?
Cities are a lot less dense down here in Germany, and while there isn't as much suburb sprawl (for lack of space and a different culture), houses are rarely higher than 3-4 floors (including ground floor) even in a densely populated area like NRW. The NRW has 18 million inhabitants spread over 34,083 square kilometres, which means some 528 people per square kilometre. Of course it's not uniform, but take it as a rough ballpark figure.
Düsseldorf itself ends up at 2681 people per square kilometre, according to Wikipedia, and that's a major German city.
By comparison, New York City packs 8.2 million people within 830 square kilometres, which means around 10,000 people per square kilometre, or about 4 times the density of Düsseldorf, 20 times the density of the NRW or 40 times the density of Germany. They should have some _awesome_ network access then, right? The New York City metropolitan area packs 18.8 million inhabitants in 8680 square kilometres, so the density is around 10 times that of Germany, 4 times that of the NRW and slightly less than Düsseldorf. (But the last one is slightly misleading since it's comparing the whole sprawl including suburbs and satellite towns to just the main city area of Düsseldorf. The comparison to the whole NRW is a lot more accurate.)
3. But that all becomes a lot less relevant when you notice that density doesn't correlate to net access that well in Europe either. E.g.:
A. Actually the best places for net access aren't in such dense industrial areas of Germany, but actually in many rural areas. Somehow the Telekom ended up upgrading the net access to some villages and small-ish towns before the larger and denser cities.
B. Among countries, the best access is in countries like... Sweden. According to the link you posted, it ends up at 20 inhabitants per square kilometre, which is considerably lower than the USA.
Ok, so there the frozen north is mostly empty space, so let's look up Stockholm on Wikipedia. Stockholm itself is pretty packed, at 4,136 people per square kilometre, but then that's still peanuts compared to, say, New York City. If you take it together with its suburbs, i.e., the whole metropolitan area, it's a meager 499 people per square kilometre. Compared to the NYC metropolitan area, it's outright sparse. Some of the suburbs have as low as 80 people per square kilometre.
Basically, to wrap this long rant up, population density doesn't seem to correlate to net access _that_ well. Sure, noone drags optical fibre to some lone hut on the top of a mountain, but you don't need ultra-packed communities to get broadband either. And in between those extremes, the correlation is at best imperfect, and at worst non-existant.
A polar bear is a cartesian bear after a coordinate transform.
Who modded this nitwit informative? Libertarians most certainly do not believe in a government which can't stop people from blowing up their competitors factories. Those are anarchists, not libertarians. Libertarians fully believe in government that exists to prevent coercion, of which the blowing up factories would fall.
You obviously fail to grasp the ideas behind libertarianism, so you're hardly qualified to criticize them.
Krugman is on the receiving end of character assassination because he's stood in opposition to the Bush presidency even when it was popular, based entirely on their policy position. He's been characterized as "shrill" due to his consistency in holding this position. Some would call this intellectual honesty in a pundit, but those who dislike his conclusions can't admit that.
Has he made a few errors? Yes, even a few doozies, which have been corrected, ad nauseum. I do believe that he's more vulnerable to fact-checking based errors because he actually works to base his columns on facts, vs. working through baseless assertion and anecdote - paging David Brooks, Maureen Dowd, and many, many others who pretend to be working in fact but instead focus on rhetoric. These "colleagues" (i.e pundits at the NYT and other top-circulated newspapers) are rarely held to the same standard that he is. It's much easier to "let them off the hook" for far more sweeping assertions because their reflecting CW, and not challenging it.
Who modded this nitwit informative ?
Nihilists don't blow up factories ! Those are fiedists, not nihilists. Nihilists simply don't see the point in blowing anything up and believe the workers and owners should simply give it all up since it doesn't matter anyway !
You fail to grasp the utter pointlessness of nihilism so you're hardly qualified to use them in your post.