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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.
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
I know an economics professor, incidentally, who noted that regulations on trade are generally put in place by the rich and powerful and act to keep the little people down. This is a textbook example.
The World Wide Web is dying. Soon, we shall have only the Internet.
We in way shape or form have "completely unbridled market capitalism." Thats impossible when you have government granted monopolies, the FCC, etc.
Telecoms are using government regulation in their favor. They don't want capitalism.
Gone!
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?
Er... the telecom industry represents completely unbridled market capitalism?
Except this isn't an example of "unbridled market capitalism". The original copper network was a private/public compromise built on private property seized by the government with its power of immanent domain.
The federal government allowed monopoly control of the copper by one company, as long as it agreed to follow certain rules that a normal company would not need to. That is why multiple phone companies were allowed to compete on the same copper.
Now we have the case where companies are not fulfilling their part of the bargain and the government isn't enforcing it any more.
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?
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.
The irony here is that, despite the heavy-handed government regulation, that's actually not true in telecommunications. The lack of competition would still exist without the regulation, because once one participant has built infrastructure, other participants will usually not find their return on building duplicate infrastructure to be worth the very intensive investment it would take. The regulation simply forestalls the natural solution to this problem: making the capital-intensive infrastructure a public utility and allowing providers to do the much less capital-intensive job of competing on the public infrastructure, which would still provide the benefits of competition to consumers.
...the Mexican telecom magnate and his monopoly in Mexico
A very heavily government protected monopoly. Hardly a case of "lack of regulation" I guarantee you. In fact it's a prime example for the libertarians to use against regulation. What we need is for the public to keep a close eye on how things are regulated and actually use their vote to weed out the crooks, otherwise it will only get worse.
What?
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.
You must be taking your information from post AT&T breakup, 1981'ish. Back when the publicly owned and traded phone "monopoly" was f'd up. HiTF a publicly traded company can be considered a monopoly I would like to know. But, anyway...
The original copper network was a private/public compromise built on private property seized by the government
No sir. The original copper was being put in place in the mid 1800's along with the railways. The land was "seized" from the native Americans.
The federal government allowed monopoly control of the copper by one company, as long as it agreed to follow certain rules
Bell was given credit for the phone making The Bell Telephone Company was the only player in the market. The government owned the copper it put in place until the, then, "American Bell Telephone Company" built enough exchanges to receive through government grants the existing copper because uncle sam didn't want to pay for upkeep not to mention it needed private phone system and couldn't do it due to patents:
Until Bell's second patent expired in 1894, only Bell Telephone and its licensees could legally operate telephone systems in the United States http://www.corp.att.com/history/history1.html
Up until the 80's the majority of old folks had their money tied up in phone stocks and government savings bonds. The industry was broken up to get that stagnant money back out in the world to pump the U.S. economy back to life.
The reason we don't have good network connectivity is the constant fighting for control of what is unarguably the biggest industry in the U.S. Everything, in one way or another, is dependent on communication. The people in the industry are the second most greedy pieces of sh't on the face of the earth. Absolutely everything they do is for their own benefit. The massive tax cuts they received to "modernize the infrastructure of our nations communications" went directly onto their bottom line. The proposals that Google et. el. are putting together are the only signs of hope the people have to break free from the same ol sh't.
Having to work for a living is the root of all evil.
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).
Rule of Slashdot #0: You and people like you are not representative of the larger population. - A.C.
You are focusing on the tradition way to build a telecom infrastructure. What unregulated competition encourages is "lean and mean" telecom providers that can survive by creating a cost-effective infrastructure... even if it requires them to mountn $10 hubs on telephone poles.
Since no where on earth (no country I have ever read about) has had a company build the infrastructure from scratch if there is already an existing infrastructure, it strongly suggests that the situation you desire for "true" competition is impossible and this crippled regulatory "competition" is the best we can manage. Idealists (as capitalists are) tend to neglect data and lean heavily on appeals to emotion, authority, or down right repetition. True unbridled capitalism is impossible due entirely to not making the right assumptions about people. Just as Marxist communism is impossible because it fails to account for the same thing. Given the ability to really compete or to bride, cheat, and monopolize all companies would prefer the later.
"There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."
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.