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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.
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.
It still costs a lot of money to string fiber up to every residence. Competition could, theoretically, actually impede development of such a network, since they're so expensive to build that you're only going to build it if you have a reasonable expectation of recouping you investment.
Not only that, but it's horribly inefficient for us to build multiple networks. There should be one physical network, and competition should exist on it.
The problem is that in most of the country (Everywhere non-Verizon), this network isn't being built. And in Verizon territory, there is no competition allowed. Worse, in some areas, inferior technology is being installed (FTTN, etc..) that will actually delay the possibility of anything but 7ish Mbit ADSL. Even worse, we paid for the fiber network, but we don't actually have it.
What is needed? We need some politicians with ethics who aren't in the pocket of the telcos to actually stand up and hold them to their promises. Either that, or we need the physical network to be a public utility. The former would be best for everybody, but it hardly seems likely... Everybody up the chain from the local town governments on up to the senate and even the executive branch is used to receiving their cut of what are essentially bribes from last-mile carriers (unscrutinized regressive taxes on citizens, really, funneled through telcos and cable-cos into local treasuries and national campaigns), and nobody is going to give the money back unless the voters hold them accountable. Most of the voters don't even know what's going on.
"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?
Not the Netherlands - they have a +$45 billion trade balance and a budget surplus. Financially, they are golden. The only G7 country that is in similarly great financial shape is Canada.
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.
In most of America, only two companies are allowed to run wires into your home, the local telco monopoly and the local cable monopoly. The existence of the cable and telco monopolies is responsible for the problem. As long as that's the case, you're just arguing about the best way to manage the ripoff. Any regulatory scheme, at best, simply minimizes the ripoff. At worst, it leads to the two companies having undue influence over regulators.... and indirectly gives the regulators vast power to regulate and monitor private communication.
My own feeling is that the very idea of regulated telecommunications is inconsistent with the First Amendment. I don't think it could be any plainer. But I'm not holding my breath waiting for the court decision.
What is needed? We need some politicians with ethics who aren't in the pocket of the telcos to actually stand up and hold them to their promises.
Then end corporate personhood. In fact, why not write your Congressman about it today?
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.
What you don't understand, is that effective regulation is required to have any kind of long-term competitive market, especially when the product is not a commodity.
When it costs in the neighbourhood of $200 million to run a presidential campaign they're going to be in a number of pockets.
Some of what I say is fact, some is conjecture, the rest I'm just blowing out my ass...you guess.
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.
...of plant and service.
Personally, I'd rather have two bills - one for the physical layer (cables, swtiches, and maintenance) provided either by the government or pseudo-governmental corporation, and one or more for the data (of any kind - voice, video, internet). By segregating the two, you can allow local issues to be dealt with as a local problem, and offermake up funding for low-density where "the government" feels necessary (rural electric comes to mind as an example, if not the best one). For those afraid of government, realize that most areas run their own water and sewer, and do a fairly good job, on the whole. And I'm not saying it has to be government - a corporation can run the plant (under gov. supervision - any monopoly needs close oversight).
By separating the physical and the data, you can offer _real_ competition by local or national providers. Think of long distance telephone service - it's in a hell of a lot better shape (for the consumers and competitive pricing) than, say, local telephone or cell service (Verizon, anyone?). Most places don't even have the possibility of a competing high speed carrier because the physical plant operators can charge whatever they want for access, and as a result their services will always end up being more competitive.
Power would be nice this way, too. I already have the physical plant portion broken out on my bill with generation costs separate. By prohibiting the physical plant operators from having any financial interest in the service operators, there will be a more level footing - and more opportunity for competition.
Oh, in case you're curious, the incumebents know this, and would lobby to their deaths against any mandated separation.
Is it just my observation, or are there way too many stupid people in the world?
Totally OT, but still...:
The tax rate percentage is irrelevant. What is relevant is how much money a taxpayes has in his/her pocket after paying taxes, and what he/she can buy with it. In short: purchase power.
I wouldn't mind paying 90% taxes if I lived in a country where my salary was a million USD for the same job I have today.
As it happens, I live in Denmark. Our average taxes are around 46% and on top of that we have a 25% VAT (sales tax). Does that mean I am poor? No! It means my salary and the entire economy around me has been adjusted to that level. My purchasing power is equal to (and in many cases greater than) most other people in other countries with a job just like mine.
And btw... even though we have a social system which gives us free healthcare, free education and better social security that doesn't mean we are a "highly-socialist" country. In fact I think our liberal prime minister would find your comment rather funny.
- Jesper
My security clearance is so high I have to kill myself if I remember I have it...
Let's see... about 24% of my income goes to federal & state (no local) income and payroll taxes... and, my best back-of-the-envelope guess is that I pay another 1%-2% in gas taxes, my car tab, and other user fees. (I own no property.) Yes, I'd happily pay half of my income to live in a country where we really had all of that stuff. Many Americans react just like you did when I say that, because the government is so ineffective here that they can't believe it would actually work. But there are a number of countries where it does, most notably a few of those evil European welfare states.
Obviously, competent management and fiscal discipline are necessary for such a state to succeed. Ultimately, those are political problems and are the responsibility of the people. Ask yourself why certain other countries have them and the U.S. doesn't. I think you will find the answer has to do with how people are educated.
we paid for the fiber network, but we don't actually have it.
Why do the congress critters need to hold the telcos responsible when we the customers can. As you pointed out, we paid for a service that was not delivered. That sounds like a giant class action lawsuit to me. Now if it were an individual person I think that it would qualify as fraud, and that person would face prison, but in this case the criminal is a corporation with corporate personhood. So how do you jail a corporation? Well jail is basically the loss of you freedoms to the state, so that is what we should do here and in other cases of corporate criminal activity, take away control from the those in control and give it to the state for the duration of the sentence. That would mean the stock shares are frozen and cannot vote, the upper management/board of directors is not paid or allowed accept new employment, and a state Warden will run the company with the sole goal of maximizing the public good through the companies line of business, shareholder profits or losses are not considered in state Wardens decision making process, only the maximum quality at best possible cost to the existing customers. Yes the executives and the shareholders will get screwed in this scenario, but they are the ones who's greed and poor decisions lead to the fraud in the first place.
We are all just people.
When it costs in the neighbourhood of $200 million
Well, it will do when you make the campaign season last over a freaking year. I always cringe around election time in the US. How much productivity and money is wasted in this regular orgy of popularity contests?
Go for the British model. Announce elections, campaign 5 weeks, over and done with.
Forget campaign finance laws and lobbying problems. Just drastically shortening the election season alone would make a huge postive difference in the US.
Linux, you magnificent bastard, I read the fucking manual!
A salary of $60k in Iowa is equivalent to $100k in California. $60k/year will buy you a nice family house, decent car, and a easy-going lifestyle. If the national telecom infrastructure was up to date, there would be many jobs that can be done in the middle of Iowa that are now done in California. Alternately, for a bit more than the salary you pay to an Indian programmer (well, a bit more than those who now are demanding more money...), you can get a native English speaker *in a nearby timezone*.
With low-quality or no broadband, you lose this potential workforce.
Or, at least, so goes the theory.
In all fairness, it's not really socialism - none of the countries mentioned (Netherlands, Canada, Scandinavian countries, etc.) have command economies, state ownership of property, and so forth. A lot of Americans seem to think that a national health care system automatically equals gray concrete walls and red stars, but it's not so.
On the other hand, the U.S. is still the best place to go and start a business, thanks in no small part to their labour mobility (easier to hire and fire).
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.
The band width you are not getting is because spammers are getting it...
Your bullshit call is for the most part the only thing that is bullshit. The grand parent is correct you can travel between any of the original 13 EU members without stopping. Since the Schengen agreement all interior border controls were removed and the only border and customer enforcement is around the edges. If you have an EU passport its relatively easy to move around and work in EU countries.
The grandparent slightly overstates when he said "any country in the EU" since I don't think the newer members have signed on to these open borders yet.
The EU has really become the United States of Europe. Its more like the early United States since the states still retain a lot of power, but assuming it holds together it will probably continue to become more like one nation over time.
@de_machina
Rule of Slashdot #0: You and people like you are not representative of the larger population. - A.C.
They do owe, we all pay into something called the universal service fund that subsidizes the cost to connect distant and otherwise unprofitable customers.
Actually, "corporate personhood" only protects the owners (i.e., shareholders), not employees. Employees of a non-corporate company (i.e., a partnership) are no more or less liable for their actions that those of a large corporation. In principle, employees are responsible for their actions, and management is responsible for actions of their underlings, though in practice it is hard to convict people, this has nothing to do per se with their status as a corporation. The difference is, in a partnership, if an employee screws up while performing duties for the company, all partners have potentially unlimited financial liability. In a corporation, liability to the owners only extends to the assets held by the corporation.
There are lots of other ways in which corporations are treated as people, but most of it comes down to "they are non-person entities which can own property" -- this is the root of their ability to be slandered or libeled, their ability to be a party to a lawsuit, and so forth.
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.
There is a partial solution. Thanks to the telephone investment earlier, you can get a T1 anywhere, and pay from $300 to $600 / month for 1.5Mb service. Get the neighbors together for a coop, add some WLAN, and you have almost broadband in the sticks that doesn't have multi-second latency like satellite. Get enough neighbors together with a lily pad WLAN, and you can upgrade to T3. (I know people who have done this. Don't use consumer WAPs designed for indoor use. Use outdoor models for a few $100 more that have lightning protection.)
If you can get line of sight to a friend/business partner in a nearby city, you can get 54Mb via a point to point wireless connection. With parabolic antenna, you can go quite a ways. The current record is 237 miles from a city to the side of a mountain in Venezuela (the mountain is critical to this setup as otherwise the horizon would block line of sight at this distance).
Finally, cell phone service goes many more places than broadband, and cell carriers offer broadband plans via their network. (So long, and thanks for all the honey...)