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The $200 Billion Broadband Rip-Off
Jamie noted that Cringley has a piece about the US Broadband situation. He talks about where we were and where we are: 'not very fast, not very cheap Internet service that is hurting our ability to compete economically with the rest of the world' and about the $200B the phone companies got to make it that way.
I blame lack of competition. What's needed is laws that lower the entry barrier for ISPs.
Mainstream economic theory clearly states that free markets only work when they are both competitive and transparent, and yet, just as clearly, the profit motive drives companies to minimize both competition and transparency. Profit itself is therefore inherently at loggerheads with the two prerequisites of free markets. As competition and transparency decline, so does market efficiency, until at some point inefficiency yields to outright market failure. We already have market failure in many industries - oil, diamonds, OS and Office software, telecommunications - and now broadband too, it seems. It's funny this contradiction raises so few eyebrows...
A-Bomb
These companies can sell you an 8 meg broadband connection, they'll sell it to 100 people and the line they're selling this on is an 80meg connection (example, not right numbers but right point). Any industry that can do this legally (or just get away with it) is clearly going to screw any consumer they can.
"He who can destroy a thing, controls a thing." --Paul Atreides, Dune
Let me tell you 'bout my friend in Holland. And, no, I don't mean Holland, Michigan. I mean Holland, Holland.
He pays some ridiculous amount of money monthly, 10 or 20 Euros, and gets high speed broadband, TV (including the porn channels) and phone. His mortgage is 3.8%. Sex of any kind is not against the law and he can travel to any country in the EU without even slowing down as he drives across the border. At the risk of going off topic, do I need to add that health care and education are free.
Could it be that there's something not quite right here in America?
...about "completely unbridled market capitalism".
What we have here is the exact opposite: Central-planning. And it has gone haywire, as it usually does.
Throw in a touch of the corruption that centralized power allows, add a little protective legislation, and you get what we have today.
Methinks you tend toward Marxist-style central control.
I would happily pay double my existing taxes to get a country with effective universal health care, a modern and well-maintained infrastructure, a people-focused government, and the financial condition of the Netherlands. Instead, I get low taxes and... nothing at all to show for those low taxes, because the people are so ignorant and apathetic that the government long ago stopped bothering with trying to serve them.
Because in several other countries your $15 a month would get you between 20-100 Mb/s both down and up.
I got ADSL In 1996 , back when it was 1.5 Mb download and 120Kb upload, today, eleven years later
I get 8 Mb download and 385 Kb upload, at about 30 percent higher pricing.
Basically broadband in the US is crap. If those various companies mentioned in the article
were forced to refund the money they got for giving us nothing, and I agree we got nothing,
they would be singing a different tune. I say send them a bill for the money they received, but did
not spend on actually providing that which they said they would, PLUS interest.
Broadband should be defined at 20Mb down and 20 Mb up. Period. Too much time has elapsed
with basically zero quality or quantity increases.
You can't watch live video of any quality; you can't use any sort of interactive video link; you can't use any remote desktop solution with any level of fluidity; you can only participate in collaborative development with a very limited number of participants; you can't participate in e-commerce of any significant volume; you can't download software updates or revisions without tying up your connection entirely for minutes or hours; and, perhaps most significantly for the economy, you can't consume new, bandwidth-intensive applications such as sophisticated online gaming.
Rural areas don't drive the American economy, and particularly high-speed Internet at the home is not a driving economic force, mostly it's useful for pirating movies. How is lower-quality broadband out in the middle of Bumfuck, Iowa, hurting the American economy?
OK everyone in rural areas stop working, and let's see what happens when kamapuaa realizes that his food is not grown in the supermarket. Rural areas DO drive the economy - just not the part YOU think is important.
Seven puppies were harmed during the making of this post.
In most of America, only two companies are allowed to run wires into your home, the local telco monopoly and the local cable monopoly.
Not true. In California (and many other states), there is no dejure cable monopoly. All cable companies are "allowed" to run cable if they so elect. The nature of the problem isn't that they aren't allowed, but rather that they'd rather not. I.e., they are indeed a natural monopoly. Alas, they are not regulated as one.
C//
I really think you have to live in the USA to understand where we come from.
Our country was founded that government is evil. The tradeoff here is that no government is worse, so it's a lesser of 2 evils choice.
Because of the belief that government (and direct influence, like govt provided health) is evil, we should keep as much as we can away from it. Also, most have a deep distrust against government.
Nations like Denmark are not evil, or disgusting because they have socialized medicine, or they provide subsidized university degrees, but we distrust it. Quite a few people don't understand why they do "hate" it, but many do understand that government will screw it up. That's just our culture.
I'd say it probably also has to do with Randian-like beliefs within one of our ruling parties (Republicans). However, due to Bush, 2006 congressional elections swayed to strong Democrat, and we will most likely have a Democrat ruler at 2008.
USA is a 2-party election with very small 3rd parties that have little/no sway. We have an election every 2 years, changing all of the House and 1/3 of senate. The House and Senate are a bicameral Legislative body. House terms are 2 years, while Senate terms are 6. Every 4 years is a presidential election.
They do owe, we all pay into something called the universal service fund that subsidizes the cost to connect distant and otherwise unprofitable customers.
This is exactly what I argued at the CPUC hearings for the AT&T-SBC merger. I started off by saying that a mistake was made thirty years ago, when AT&T was forced to divide itself King-Solomon-like. What should have happened, instead, is that AT&T should been forced to become a nonprofit corporation or pseudo-governmental agency, similar to the Postal Service.
Our postal network and roads and highways are generally recognized as common shared infrastructure; we don't allow the construction companies that build and maintain them to OWN the sections upon which they work, do we? Given that telecom and data networks are every bit as much shared public infrastructure, why then have we allowed the corporations that built those to own the pieces?
We fucked up many decades ago, perhaps as far back as the first telegraph lines, when we failed to recognize that the components that make up electronic (and now digital) public networks are common infrastructure, of the same sort as highways, and thus infrastructure which should be publicly owned. This is one instance where MORE socialism, not less, would be an enormously good thing.
I see this situation as even more precarious than you do, because the minute a major power decides they don't need to keep funding the homes, SUV's and Big Macs in the United States, it's all going to go down the tubes. The USA is an incredible drain on the world economy. I'm terrified of the day that dries up, because it is not going to be pretty. What exactly happens when the USA's economy grinds to a screeching halt, with the only thing the USA has to its name is a few hundred ICBMs, with China being the major industrial superpower? I'm not really convinced anything has changed to keep such volatilities from erupting in the same way they did in the first half of the 20th century.
You're quibbling over trivial crap and missing the Big Picture: we wouldn't now be having huge battles over 'Net neutrality if disparate pieces of the infrastructure weren't privately owned. The same goes for cable companies: we wouldn't have had to endure channel "bundling" and other evil tactics if we hadn't allowed them little monopolistic fiefdoms of privately owned infrastructure.
Back to the Big Telecoms, need I remind you that cities and counties can't even manage to create their own publicly owned wireless infrastructure, because every single time they try they get sued by the local telecom, claiming "anti-competitive practices"?
Big Telecom wants to keep the infrastructure private, because that is their means of control of their fiefdoms, in the same way that drug and genetics patents enable Big Pharma to maintain control of their fiefdoms. That right there is the strongest argument in favor of making all such public infrastructures publicly owned.