How Can the Stimulus Plan Help the Internet?

Wired is running an article raising the question of how a US economic stimulus plan could best help broadband adoption and the internet in general. We discussed President-elect Obama's statements about his plan, which would include investments in such areas, but Wired asks how we can avoid the equivalent of the New Deal's "ditches to nowhere" without more data about where the money would actually make a difference. Quoting: "... the problem is that no one knows the best way to make the internet more resilient, accessible and secure, since there's no just no public data. The ISP and backbone internet providers don't tell anyone anything. For instance, the government doesn't know how many people actually have broadband or what they pay for it. ... In September, the FCC found that its data collection on internet broadband was incomplete and thus ruled that AT&T, Qwest and Verizon could stop filing some reports — because the requirements did not extend to cable companies, too."

Comments

offtopic question re. slashdot

[gcnaddict]

Totally offtopic, but what does the red titlebar mean for a story on the index which just went up? I didn't see any reference to this story being a story "in the future" so I'm not quite sure what it is.

Re:offtopic question re. slashdot

[corsec67]

That happens when the future is now.

Premise guarantees failure

[MSTCrow5429]

Central planning will always lead to ditches to nowhere. Without an ability to perform rationale economic calculations, an economy cannot function. Any effort by the State to manipulate or direct economic planning will lead to increasing economic irrationality and inefficiency. The only way to maximize the efficient use of resources is to remove government coercion from the marketplace, and let voluntary cooperation and aggregate individual choices locate the closet to optimally possible solution to any problem.

Re:Premise guarantees failure

[giorgiofr]

E.g: get rid of the regulations and red tape preventing communities from building mesh networks and most cities will be covered faster than you can say "gov't managed central planning always fails".

Re:Premise guarantees failure

[Rinisari]

Exactly. The consumer will direct the market based on the availability of competing, cheaper services.

The $200 billion that the telecoms got in the 1990s to wire America was squandered, and very little was actually done with it (arguably kept prices for existing services at the same level instead of having them go up, but not more than that).

This is where municipal government--boroughs, villages, city sections--could play a hand in essentially buying groups--"aggregate individual choices"-- for broadband service, but still allow residents to choose their own provider.

Re:Premise guarantees failure

[hedwards]

Right because people don't choose to pay for Windows over Linux, a more expensive carrier of cell service over a less expensive option or reward monopolist misbehavior.

Seriously though it really depends greatly upon the situation. Central planning is very important when the service needs to work coherently across myriad municipalities providing that it is done in a sane way.

Assuming that market forces are going to work all the time is what got us into the current meltdown of both the economy as well as the internet hardware.

And even without that, there's no particularly good reason to believe that infrastructure building is going to result in anything other than additional spam and larger DDOSes.

Re:Premise guarantees failure

[Timothy Brownawell]

Central planning will always lead to ditches to nowhere.

[citation needed]

Without an ability to perform rationale economic calculations, an economy cannot function. Any effort by the State to manipulate or direct economic planning will lead to increasing economic irrationality and inefficiency.

The perfect efficiency that markets try to approach is short-sighted (this also makes them unstable, with a tendency to collapse to monopoly/oligopoly). Some diversion of resources towards longer-term goals is useful, why do you think any country has a public education system?

The only way to maximize the efficient use of resources is to remove government coercion from the marketplace, and let voluntary cooperation and aggregate individual choices locate the closet to optimally possible solution to any problem.

You also have to eliminate all other forms of coercion and tying and collusion, and provide everyone with perfect information and zero transaction costs. And you still end up with that short-sightedness.

Re:Premise guarantees failure

[sjames]

Yeah, I don't know why they don't just dynamite that useless Hoover Dam and those useless interstates.

I fully agree that a centrally planned economy doesn't work well, but that doesn't mean that centrally planned projects or public works don't work. Sometimes when a market settles into a local minimum, only a swift kick from outside can get it seeking an optimal solution again.

Another case for a public project is when the market players are too localized. The telecomms will never in a bazillion years sacrifice even a fraction of a percent of their profit even if it would double the profitability of every single player in every single market but theirs. Not even if after 5 to 10 years it would probably come back and double their profitability as well (you see, a voluntary loss of .0002% profitability wouldn't look good on the quarterly report).

One of the axioms of any market based economy is that entities ALWAYS make rational economic decisions. I have my doubts. Actors in the economy mostly make knee-jerk heard mentality decisions.

It may be that a market solution IS better in this case, but 'market=good, public work=bad" is not a reason, it's an unsupported conclusion.

Re:Premise guarantees failure

[MSTCrow5429]

Assuming that market forces are going to work all the time is what got us into the current meltdown of both the economy as well as the internet hardware.

This quite simply is a canard. The main impetus of the current state of the economy is the boom and bust cycle created by the Federal Reserve, the central planner of the monetary supply in the US. The Fed greatly inflated the money supply through artificially low interest rates, reserve rates, and the direct creation of new money. Combined with Congressional pressure to lend money to noncredit worthy borrowers, an artificially high demand for goods and services was created, leading to overexpansion and overconsumption based on an illusory increase in real wealth. No illusion can mold reality forever, and the bubble popped.

There is also a popular misunderstanding that the alleged propensity of the Bush administration is somehow to blame for the current situation. Since 2001, there has been a 70% increase in new regulations that are "economically significant" (compliance costs per rule will cost at least $100 million per year), and the number of pages in the Federal Register listing all new regulations reached an all-time high of 78,090 in 2007, from 64,438 in 2001. From 2002 to fiscal year 2009, the federal regulatory budget increased 65% in real terms, to ~$17.2 billion. More recently, the inept SEC was unable to detect Madoff's ponzi scheme until it had collapsed, once again showing that the SEC gives investors a false sense of security, and while fully capable of distorting securities markets, is incapable of policing them. More regulation is not the answer, it is the problem.

Seriously though it really depends greatly upon the situation. Central planning is very important when the service needs to work coherently across myriad municipalities providing that it is done in a sane way.

The rise and existence of de facto standards, which are brought about by voluntary cooperation and individual choice, belie the need for any such central planning. There are many examples of such attempts to bring a service that works coherently "coherently across myriad municipalities," but as the general topic at hand is the internet, that of Minitel is sufficient. As most no doubt are aware, Minitel was an effort by the French government to create a standard and build a networking infrastructure for the use of all French citizens. Unfortunately for it, the internet then came along, and the increasing abilities of personal computers and networking hardware and software in the closer to free-market economy of the US made Minitels dumb terminal network look, well, rather dumb. One may attempt to argue that the internet was created by the US government, which is true, but it existed for decades as a small, mostly closed research network until commercialization began in the 1980s. What is being proposed by the uber-parent is taking the internet, and applying the Minitel doctrine to it. This is a very bad idea, and can do nothing but supply corporate welfare to entrenched constituencies while bleeding resources from the functioning private sector, leading to a damaged networking infrastructure being applied to the current network, and greatly retarding the emergence of newer and better networking technologies.

Re:Premise guarantees failure

[nine-times]

The only way to maximize the efficient use of resources is to remove government coercion from the marketplace

First, that assumes a real free market. Most people think that the important part of a "free market" is that there are multiple providers, and say, "Hey, there's cable and the phone company. You have 2 companies, so you have competition!" However, those two companies have a duopoly over the infrastructure, and so aren't really subject to the market forces that exist when you have a "free market".

The real important part of the "free market" is the low barrier of entry for newcomers, i.e. the ability for a new company to come along and set up their own ISP. You might be thinking right now, "What are you talking about, there are plenty of ISPs! There's not just Verizon and Comcast (or whoever your local phone and cable companies are), but there's Speakeasy and Earthlink and lots of other people!" Nope, there aren't. Those ISPs are providing rebranded service over Verizon's network. The fact is, even if you had the resources to start a company and string fiber optics everywhere, you wouldn't be allowed to do that. So if Verizon doesn't want to string fiber to an area, then you'll never get fiber connections in that area.

Now you might say, "That's what I'm talking about, remove the 'government coercion' that prevents people from stringing fiber everywhere!" Ok, great, now you'll end up with laws that allow any numnuts with a shovel to dig up the streets and other people's yards because they're "laying down cable". It'll be a mess.

Sorry, but really the Internet is "infrastructure". It's like our highway system. Is our highway system a failure, because it's nothing but "ditches to nowhere"? Should we turn over our highway system to Verizon for them to decide where they want to build roads?

Re:Premise guarantees failure

[Iamthecheese]

You're right! We need an immediate return to communism!

Re:Premise guarantees failure

[mcrbids]

Any effort by the State to manipulate or direct economic planning will lead to increasing economic irrationality and inefficiency.

This sentence entirely ignores a reality of economics: economy is a product of government.

Economy is a balance; on one hand you have private efforts which maximize personal profits at cost of the public good (see the tragedy of the commons and on the other hand you have social "public entities" like governments which seek to preserve the commons.

In truth, there is no such thing as a "free" economy - a "free" economy requires a government which provides infrastructure for operations. Infrastructure can include things like a universal currency, a set of laws which establish the rules of a market, physical commodities which can be used for commerce (such as roads, highways, information conduits) and a well-educated population.

The reality is that economy is a product of a well-managed government. Take a look at the most obvious: the Internet.

AOL tried to create an online universe. So did Compuserve, and countless others. They all failed because they were all tried to establish public infrastructure through private enterprise, which never works. That's the role of government, which establishes the public infrastructure that private enterprise takes advantage of.

The government establishes public infrastructure (such as roads and highways) that private companies then exploit (such as Arco, ATT, Ford, NetZero) to make profits, which are then taxed by the government as a return on investment.

This isn't "bad", it's a form of socialism that you exploit every day as you drive to work. And yes, I know that "socialism" is a bad word (tm) in the United States, but it's a reality that we all enjoy.

Without this infrastructure, without a solid monetary system, without highways, clean water, roads, phones that work, etc. the modern economy would collapse overnight. Yet the modern economy didn't establish any of these - they all came from our government.

The United States has one of the purest, most "open source" governments ever in Human History - it's just idiotic that so many Americans treat it with suspicion and contempt!

Re:Premise guarantees failure

[sjames]

The best answer would be a network of last mile fiber and a mesh of inter area fiber. A nice thing about fiber is that it can carry many channels at different wavelengths at the same time. Perhaps a default frequency would peer you with the government provided ISP but leave the option to use other frequencies to connect up with various private carriers you might sign up with.

So, much like you sign up for cable internet or DSL and they send you a 'connection kit', you sign up for fiber internet and they send you an appropriate GBIC. With the right gear, you could connect to more than one and use policy routing. The idea being to route around any government or corporate damage.

The recent debacle of the NSA conducting domestic spying with the help of telecoms providers and current events in Australia demonstrate that leaving it to private corporations doesn't necessarily grant us uncensored and unmonitored communication anyway.

As long as private contracts with ISPs are not forbidden as part of the rollout, a public internet access option can help you even if you don't use it simply by setting the bar. If the public ISP will give you 50Mbps for $10/month, other providers would have to fall in line to compete. They couldn't likely go cheaper, so they'd have to offer some combination of less censorship or greater bandwidth if they wanted to stay in business.

The best way to help...

[LynnwoodRooster]

...is to get rid of the whole "stimulus plan" to start with. Lower taxes rather than collecting them and redistributing to chosen pet projects (with an appropriate cut for the voracious appetite of Government to waste).

Re:The best way to help...

[isdnip]

Then, when the Second Great Depression leaves a 40% unemployment rate, you and your few remaining rich friends with their inherited cash and other still-liquid assets will have a really easy time getting lots of servants to work for you for a pittance!

Re:The best way to help...

[jwiegley]

So you suggest that instead I be punished for managing my affairs well?

For saving my money, for doing my investment research, for planning my retirement, for getting good grades, for sticking with jobs, being competent and all the other items that I put personal effort into making my finances secure I should pay for other people's mistakes? That I should shoulder a larger tax burden than another man? I should be legally coerced to support and fund organizations and corporate strategies that I fundamentally disagree with? Is that it?

People that think that's better is why we're in this problem in the first place.

See my sig and learn a lesson.

Re:The best way to help...

[roman_mir]

I am very sorry for the people, you know, I feel terrible that such bad times are coming. But they are coming, there very very close and no amount of regulation and spending by the government can do anything about it.

Government can never do anything about economy except for making things worse. For some reason, which still eludes me, many people believe that government must have a role in economy. This is perplexing, after all, the government is not supposed to be a for profit outfit. They are supposed to do things that will not normally be done by private enterprise, for example building interstate roads and such (I am not American, I can't be certain of all the things that government really is doing in the States.)

One of my points is that it is nonsensical to expect any entity in this world to be able to control the uncontrollable. Economy is like weather, it has a billion variables and they all change all the time. Economy is not a static system, it is constantly changing. Any new born human, any new store, any closing restaurant, any new shipping company, any new invention, any new efficiency, any war, any incident, all of those things have an effect, nothing can control those incidents.

But on the grand schema of things, you know, on the macro-economic level, the government can do things. Bad things. They do them for their own purposes with their own understanding. Artificially pushing interest rates down, printing new fiat dollars, removing the backing of the dollar by the gold, coming up with legislation for 'fairness'. Attempting to meddle with economy in any way, will always always always always always be to the detriment of the economy.

Now, government can force environmental standards, prohibit illegal use of monopolies for killing competition and such. This is also detrimental in one sense, but can be beneficial in another. However flooding market with phony dollars, that is definitely going to have a detrimental effect.

Imagine this: the dollars are understood to be phony by the outside to the US world. The world that lends money to the US. US owes tens of trillions in debt and this debt cannot be repaid.

From point of view of a single citizen (you know, they used to be citizens before they were all changed to consumers), this is a catastrophe. No more money is given on credit, whatever can be borrowed will have enormous interest rate. If the interest rate is not pushed up, the dollar will fall to 0. Simply to 0. It will happen the way it happened in many countries for the past 100 years.

Imagine buying a loaf of bread for $100 in the morning, and by the evening realizing that now bread costs $1000. $10000 in 5 days from then, $1,000,000 in a month, $1,000,000,000 in half a year. That is not impossible. That is what happens when government gets their hands into economics. They don't actually understand economics, even worse, it is not in their best interests to act upon understanding of economics.

Don't expect a man to understand something, is his job relies on not understanding it.

So why am I saying this? Well, recession is here. Government will attempt to maintain the phony dollar and will create hyper-inflation by pushing interest rates down. People will freak out and will stop buying everything except food and probably energy (you know, for heating and such.)

Goods will become scarce, as lender countries will stop lending. The problem is, once they stop lending, the US will have nothing to buy outside products with. This is bad news, at that point it is going to be a depression and probably a deflation of resources and goods that are of not essential value (not food).

In a situation like this the following will happen:

1. Government will fix prices. Obviously this will cause shortages, nobody in their right mind will want to sell for nothing. USD will be nothing.
2. Shortages will cause panic and probably hunger and anger.
3. Whoever has any means left will attempt to flee the country. O

Re:The best way to help...

[An Onerous Coward]

It's very lazy or stupid of you to assume that the poor are poor because they are lazy or stupid.

It's also lazy or stupid of you to attribute these fishy statistics to the New York Times. What you linked to was actually a book excerpt that the Times merely reprinted. They would be more appropriately attributed thusly: According to "The Millionaire Next Door: The Surprising Secrets of American's Wealthy" authors Thomas J. Stanley, Ph.D and William D. Danko Ph.D...

But two random doctorates who wrote a book congratulating millionaires for being millionaires just doesn't have the same ring of progressive credibility as "according to the New York Times," does it?

Regardless of the statistics you cite (which are cherry-picked, and may or may not be properly collected), it doesn't change the fact that sociologists cannot find a better predictor of a person's socioeconomic future than their parents' socioeconomic background. It's a stronger predictor than race, gender, IQ, or scholastic achievement (individual or parental).

It's also true that the highest performing children of poor people graduate from college at approximately the same rate as the lowest-performing children of the wealthy. I don't remember exactly how the statistics broke down, but it was something like being in the most talented 20% of all children in the lowest income quartile gave you about the same graduation rate as being in the least talented 20% of children in the highest income quartile.

Being the idiot child of a rich person is a more secure route to success than being a bright and talented child of a poor person. In such a society, chalking your own success up to hard work and everyone else's failures up to stupidity is a cruel and narcissistic sort of stupidity.

Re:The best way to help...

[An Onerous Coward]

I'll see your sig, and raise you a "then you're a hypocritical bastard":

"When someone works for less pay than she can live on - when, for example, she goes hungry so that you can eat more cheaply and conveniently - then she has made a great sacrifice for you, she has made you a gift of some part of her abilities, her health, and her life.

The 'working poor,' as they are approvingly termed, are in fact the major philanthropists of our society. They neglect their own children so that the children of others will be cared for; they live in substandard housing so that other homes will be shiny and perfect; they endure privation so that inflation will be low and stock prices high.

To be a member of the working poor is to be an anonymous donor, a nameless benefactor, to everyone else. As Gail, one of my restaurant coworkers put it, 'you give and you give'" (Barbara Ehrenreich, Nickel and Dimed, New York: Metropolitan Books, 2001, p. 221).

You claim that nobody lives for you. Tell that to the guy who made way less than minimum wage picking the fruit you eat, or the woman who cleans your office, or the guy who bags your groceries, or the sweatshop worker who made your shirt. Each of them makes a tiny contribution to your own happiness, success, and comfort, and each is rewarded with a lifestyle that ranges from boring and degrading to borderline slavery. You take their contributions without hesitation or thought, while whining and sniveling about how unfair it is that you should be asked to give back in a small measure.

If that isn't asking somebody else to live for you, then what is?

AT&T

[mi]

Because we need telephone to reach the poor and the rural communities... Because market is failing to address this need...

We must centrally plan this vital piece of national infrastructure. (Oh, and Libertarians are all lunatics.)

Demand Side Economics

[pilsner.urquell]

How Can the Stimulus Plan Help the Internet? It can't! Already more money has been dumped into this stimulus plan that has been spent on all the major wars this country has fought.

Demand side economics is not the right solution at this time.

Internet Question on the Census

[kabloom]

It's time to start lobbying for an internet question (or two) on the census.

What?

[canuck57]

.. the problem is that no one knows the best way to make the internet more resilient, accessible and secure, since there's no just no public data.

I dispute that. The internet is a collective effort by many technical people past and present that develop it's potential. The only hinderance is politics, useless patents, corporate monopolies and the like. It is a truly free media, unencumbered by undue influence by anyone or any special interest group.

Keep the internet free, and it will serve mankind very well. The interent does not need stimulus, it needs net equality of access not dominated by any one.

Any solutions for reliability, useability will be provided as needed. Very efficient model too. For example, it does not depend on any one operation system for it's existance, even though some would have it otherwise. Maybe even open up some of that TV channel bandwidth for the internet without the ownership and licensing issues, allowing any company to provide WAN access.

The internet is truly a democratic collective. Work with it and don't let secular forces pervert it. Doesn't cost much either to do this.

Stop Telecoms and Cable Cos from Squandering it.

[Zombie Ryushu]

Right now, we have a serious problem with Telephone companies and cable companies attempting to squander and rip apart the Internet. The Internet would only continue to expand and new innovations would take root. But the problem is that local monopolies are standing in the way of that. There are entrenched intrests on many sides that want to fragment and censor the Internet, and people are too lazy and stupid to stand up and protest these actions. Its not government regulation thats the problem, and its not the "free market libertarians" that are the solutions. Its a couple of very corrupt, very ARROGANT shareholders that need to go to PRISON for what they are doing.

The Internet like Water, like Electricity, is becoming a public utility, it should be transparent in an transparent manner like one. And to the Cable Cos and the Telcos, no its not your network anymore.

Slashdot's short memory

[NaCh0]

For instance, the government doesn't know how many people actually have broadband or what they pay for it

Wait, I thought telcos giving the government open access to their records was a bad thing.

Come'on folks. You know anything the government touches will be abused. Stop giving these appointees more power for next to no real gain.

Re:Slashdot's short memory

[Timothy Brownawell]

For instance, the government doesn't know how many people actually have broadband or what they pay for it

Wait, I thought telcos giving the government open access to their records was a bad thing.

Come'on folks. You know anything the government touches will be abused. Stop giving these appointees more power for next to no real gain.

You don't see a difference between "Here's a log of all calls to/from 555-1234, registered to Joe Nacho" and "here's a list of how many subscribers we have at each speed in each zip code"? I tend to see personal information as rather different from statistics.

LAST MILE, LAST MILE, LAST MILE

[pyite69]

It is ridiculous that we let the telcos drag their feet so much.

We need to understand the failure of the Clinton/Gore attempt to wire the country with fiber, and make it happen for real. This will mean a lot of shared sacrifice for the local phone monopolies.

Re:Look CEOs

[burnin1965]

(you seem to be a confused AC, here I fixed your comment for you)

The internet is like a night market in a third world country. It sprang from a government funded project and, contrary to short sighted corporations, individuals discovered and utilized the value in it. You'll be damned if you try to regulate it. You guys all bitch about the new corporate kid on the block who is making huge profits providing value customers want and the loss of your birth-right to over charge for sub par services on a monopolistic network governed by price fixing schemes. For the last 8 years. But guess what, the net is still neutral and individuals are still finding value in the internet all the while paying you for the service you market to connect them to the businesses and other individuals that provide that value. Just let it be and go with the flow. The net is to nebulous and decentralized to be regulated. You'll still be able to rake in reasonable profits as long as you maintain a marketable service offering for years to come. When a new content provider starts up and makes a profit by delivering the content over the network for which you've already been paid to provide, don't worry - the free market is always there to supply you with your investment ROI fix, that is if you still remember what investment is.

Just say NO

[larry bagina]

I guess the bank bailout, auto bailout, hedge fund bailout (it's coming), and credit card bailout (it's also coming) aren't enough, we need a pork bailout (aka "stimulus").

Remember the .bomb bubble? People bought overpriced stocks on the theory they'd be even more overpriced later. That didn't work out, so to soften the landing, the federal reserve kept interest rates low, which moved money into housing.

  Remember the housing bubble? People bought overpriced houses they couldn't afford on the theory that they could sell it for even more before their interest-only mortgage came due. That didn't work out, so to soften the blow, the president, congress, the treasury, and the federal reserve borrowed trillions to bail out dying companies on the theory that they had to do something, even if it was stupid and not well thought out.

The federal government (and debt apologists) have justified excessive borrowing and spending on the theory that it will grow the GDP. That's the same kind of thinking that caused these problems for individuals and the economy as a whole. History has shown that you (we) will need to pay for it eventually, and it won't be pretty.

Don't let the ILECs ruin it

[isdnip]

The problem with current telecom policy is that it presupposes that the old incumbent telephone companies (ILECs) "own" the wires that they installed with monopoly-ratepayer money, but due to the presence of nominal competition (cable), they no longer need to be regulated as utilities. So giving them more money simply raises their profits. It raises the price they pay to buy each other up. Right now the going rate is around $3000/subscriber to buy up a rural telephone company that gets >50% of its revenue from government subsidies. They're simply bidding on the present value of these entitlements. It goes straight to the investment bankers (Goldman Sachs has been making a lot off of the subsidized-ILEC business.)

The FreePress plan is awful too. It simply ignores the ILEC networks and supposes that a few billion dollars could create a "third path", another closed, propertarian network. Of course they also want Internet content to be regulated, so their plan loses on both angles. They just hate the cable industry and collaborate with the Bells against it, consumers being a low priority.

So what might work? I suggest that the feds use the money to finance the spin-out of the ILECs' outside plant -- the loops and short-haul links between their central office buildings -- into neutral "LoopCos". They would provide wholesale access to any LEC, ISP or cableco, including their former owners, on vendor-neutral terms. LoopCos would be strictly regulated utilities (like telcos 25 years ago), forbidden from competing with their customers. Then the stimulus money could be used to finance (low interest loan, subsidies in high-cost areas) an upgrade of their legacy networks to provide (dark) fiber to the home.

The old legacy LEC (ATT, VZ, Q) shareholders would win, because a lot of their debt would move to the LoopCos, where it would be diluted by stimulus money. The Internet and its users would win because we'd have real open-entry competition, not a duopoly.

Peace dividend

[michaelmalak]

The best thing that happened to the Internet was when Clinton exploited the Peace Dividend and starved the military, and thereby the defense contractors, and they (and their employees who sometimes left to form their own companies) had to figure out how to produce for civilians rather than for the military. Without government interference and malinvestment, the people will figure out the most useful and profitable businesses.

Lay fibre

[AmiMoJo]

The government should get fibre to every home. Doesn't matter if they do it or they help/force the incumbent telco or a cable provider to do it, it is just what the economy needs.

It would stimulate the construction industry. Lots of digging and laying cables, building up local offices.

It would help IT with new equipment being required and migration of customers from older systems.

It would help broadband companies who now have a new, faster platform to sell.

It would bring new business opportunities like HD video on demand, DVD/BluRay download stores, even more random TV channels etc.

In the long run, it will bring the country into the 21st century.

Re:Lay fibre

[isdnip]

What good is fiber to the home if it's closed?

The Bush FCC (Powell/Martin) deregulated fiber to the home, even if the incumbent Bell pulled it and cut the old copper wire. So the telephone company is the sole ISP, the sole content provider, and the sole telephone service provider. They have (for various legal and political reasons) not exercised their full rights yet, but they are studying ways to make fiber to the home about as useful and free as the WAP browser on your wireless handset, just with better resolution on the movies they sell you.

The fiber has to be open (not "network neutrality" of ISPs, but open to multiple ISPs) or it will be less useful than old copper. Freedom of the press with black-and-white pamphlets is better than a full-color broadsheet (with comics!) monopoly of Izvestia.

Re:Look CEOs

[cdrguru]

You miss the point - delivering the Internet to conumers is only profitable for a company if they are a near-monopoly. Having a couple of customers here, a couple there doesn't work - there are labor-intensive resources that are tied to geography. Like fixing wires when they break.

So what we have been seeing for the last 10 years or so is just a pure market penetration play. If AT&T gets to take people away from Comcast they "win" and Comcast will pretty much cease operations in that area. And so the battle goes on and on. Each side offering better numbers (speeds, etc.) and lower prices - utterly unsustainable prices that make no sense but designed to capture market share. Once the competition is eliminated prices can return to that which actually pays for the service, but not until.

Trying to fight that mindset is impossible and it is the way anyone with substantial physical resource requirements operate from WalMart to Verizon.

Another side effect of this is the consumer isn't paying for access - they are paying some token amount that is less than their competition. Price fixing? I suppose you could call it that because if someone drops their price to gain more market share it is immediately matched by everyone else. Pricing has nothing to do with reality - especially when you can get a DSL connection for $14.95 a month. This sort of silliness leaves the providers in a quandry - can they afford to take such big losses or do they look for revenue elsewhere?

Obviously they can't raise prices to the consumer - they would lose market share and therefore in the end just lose completely. Hence the ISP approach to Google which does nothing, makes nothing and has nothing but is utterly dependent on the ISP to deliver the customer to them. And Google is raking in billions because of it. Neutrality? Ha. The only way you get "neutrality" out of this is for the customers to be paying for access. That means parity with "business rates" where they aren't fighting for market share. Your $14.95 DSL line goes to $149.95 in that case.

And for the most part, people aren't interested in the ISP as a "service". It is a vehicle to access services. Sort of a necessary evil for which there is no justification other than it seems to be necessary. I don't see any marketing campaign for the ISP which will gain them anything. All then can hope for is possibility of 70-80% market share and driving out all others because of it. Until then, they offer a service at a loss because they have to - the alternative is to just give up.

Think people are comfortable with the idea that the current ISPs are running at a loss and just hanging on with the hope of driving everyone else out? This isn't a long-term business strategy and only works if you have some other business to make payroll with. This is why there are no "independent" ISPs left and why all the ones that tried either got bought or failed. Answering the question of what comes next is why people talk about regulation because it alone holds the possibility of not having the country carved up into ISP fifedoms.

Your deffinitions presume your conclusion

[MarkusQ]

Any effort by the State to manipulate or direct economic planning will lead to increasing economic irrationality and inefficiency.

This is undoubtedly true, as long as you define "rational and efficient" in terms of the non-colluding well informed self interested rational agents that make up this hypothetical market. It's the same as saying:

Any effort by the User to manipulate or direct the flow of electrons in the CPU will lead to increasing the operating system's irrationality and inefficiency.

So, obviously, true.

But if the assumptions behind this implicit definition break down--if the market participants are themselves irrational, inefficient, short sighted, gullible, or just too damn busy to read every piece of fine print they are faced with--then your conclusion falls apart. The market will become unstable and result in a few players subjugating all the rest, and the system as a whole will cease to do anything beyond satisfying the whims of its masters.

Unless you are foolish enough to fancy yourself as one of the eventual masters, you should not be rooting for this outcome.

--MarkusQ

P.S. One way to resolve the problem is to impose some sort of progressive dampening on the system which recirculates wealth. But doing it by fiat (e.g. welfare) generally damages the value of the currency (loosely, why work if you can get money for free?) so demanding something in exchange (job creation programs) is much better. Even better is when these programs can produce something of lasting value, and better still if it's something of widely acknowledged long term value that "the market" would never have produced since it wasn't in anybody's short term interest.

Fixing our infrastructure, obtaining energy independence, building a permanent moon base, bringing global CO2 levels back to normal, any of these things would be ideal--no private entity could accomplish them, but collectively we could, and be much better for it.

Government isn't the solution....

[leereyno]

...government is the problem.

Government regulation and got us into this mess. There is no reason to believe that more of it will get us out.

Who do economic stimulus plans really help?

[macraig]

My unscientific analysis caused me to conclude that the intent of economic stimulus plans is to help the wealthiest people get back on their feet, so that then they would once again feel generous enough to not fire people or reduce their wages and the like (a sort of reverse trickle-down, if you will). Us poor folks are supposed to be thankful for their crumbs and hand-me-downs, so we should rush to send them gifts when they're not feeling the love? Doesn't that sound a bit like the baronies our ancestors were trying to escape in the first place?

I refused my $300 stimulus check from the IRS early this year, for exactly this reason on principle: it wasn't really intended to help me in the first place. I despise disingenuousness [disingenuity?], especially if it's perpetrated by my own government.

I frankly don't see what such an economic stimulus plan has to do with furthering broadband availability. It sounds like someone promoting their own brand of pork.

Sometimes it is investment in novel bussiness

[fermion]

I look around the united states and see that the places that are doing OK use the money of the 90's to diversify, while the places that are not doing so well are still making cars. It makes me think that what the money is spent on specifically is not so important so long as it is not spent on refurbishing buggy whip factories.

We wasted huge sums of cash in the 90's, but we came out the other end with many profitable long term ventures that set up growth or the US economy. Of course some people, comfortable with their 10 million dollar a year jobs did not embrace such a path to growth, and spent most of the past decade fighting or perverting the change that would cost them their jobs and often fraudulent pay checks, so the path to the next big thing is not clear. It never is, especially when we just do the same old thing . What is clear is that we are wasting out money helping old line and fraudulent businesses. For instance, for the amount of money we are giving to the automakers, who knows how much will just go to bonuses, and accounting costs for the planned elimination of half the line workers jobs, we could have a lottery to give away coupons for 80% discounts on American cars for at least 200,0000 people, thus clearing the backlog. You see, innovative ideas for innovate futures, but of course such an idea has not bonuses for the bosses.

The United states has technology for renewable energy, but very little money. Someone is going to make a lot of money on this, and the oil comapanies will lose a lot of money, unless they stop selling buggy whips. Even now I wonder if there is well in the US that can be profitably drilled for $40 a barrel. Someone is going to make a huge amount of money delivering content using TCP/IP, but the broadcasters and cable will lose money, unless they get off their butts and do it. The nice thing about this is that the middle man can be cut out, and the US can distribute to the world, if we have the bandwidth to not only deliver such content to the US population, but also to the world, which we don't.

I don't know what else the US can do, but it has to be more than selling poorly engineered cars and fraudulent financial services. Of course a work ethics that promotes such innovation will have to encouraged, which means that some of he easy jobs, the ones like the we heard about prior to the collapse of the USSR where people got paid to sit around, play chess, and drink vodka all day, will have to go.

Re:Look CEOs

[burnin1965]

You miss the point - delivering the Internet to conumers is only profitable for a company if they are a near-monopoly. Having a couple of customers here, a couple there doesn't work - there are labor-intensive resources that are tied to geography. Like fixing wires when they break.

Wow, you pulled all that out of the AC's post? You can definitely read more between the lines than I can.

Anyhow, the facts disagree with your belief that a monopoly is required to be profitable. I'm not surprised by this as you are among the majority who have either lost faith in free market and competition or never believed in it in the first place.

In reviewing the latest 10Q SEC filing for Comcast and AT&T, two opponents of net neutrality who arguably are engaged in a competitive market for broadband internet, they are making a tidy profit on their internet operations.

Comcast had an operating income of $1.7 billion after expenses, depreciation and amortization on revenue of $8 billion for their cable segment for the last 3 months.

AT&T had an operating income of $2.7 billion after expenses, depreciation and amortization on revenue of $17 billion for their wireline segment for the last 3 months.

And so the battle goes on and on. Each side offering better numbers (speeds, etc.) and lower prices - utterly unsustainable prices that make no sense but designed to capture market share. Once the competition is eliminated prices can return to that which actually pays for the service, but not until.

Welcome to the free market where ROI includes risk. It is sustainable and works for many other industries. Take a close look at electronics manufacturers, probably the most cut throat competitive industry around. Electronics manufacturers compete, some win some fail, the market continues and consumers get awesome products at great prices. When competitors lower their prices below sustainable levels in an attempt to gain market share and drive competitors out of business they are breaking the law, very much like breaking the law when competitors scheme to fix prices or use other illegal tactics to build or maintain monopoly positions so they can gouge consumers.

Another side effect of this is the consumer isn't paying for access

See the SEC reports, consumers are paying, providers are profiting. Reality trumps theory.

especially when you can get a DSL connection for $14.95 a month

That would be awesome! :) Unfortunately you picked the minimum data point for broadband access with nothing to explain exactly what you get for $14.95, the truth is that average broadband access rates are $53.06/month in the United States.

Think people are comfortable with the idea that the current ISPs are running at a loss and just hanging on with the hope of driving everyone else out?

Please, read some of the financial statements for the corporations who are fighting net neutrality and who want to tax other companies who profit by providing valuable services over the network the ISP is already profiting from.

Re:Look CEOs

[Anonymous Coward]

I think the thing people get most upset about is that once the company du jour manages to come in and take over, the quality of access degrades quickly. Monopolies don't care because they don't have to.

Take Southern California. It is a prime example of the business practices you described. Comcast was here for a long time. So was Adelphia. There was competition, and while I had Comcast, I never had television or internet outages. I rarely even had slowness issues.

Then, enter Time Warner, the crappiest cable company on earth. They take over the services of Comcast and Adelphia with their financial might. Not six months later, and my television starts going to pure snow every evening hour a couple hours. I ask Time Warner to come out 3 times over 2 months to fix it. They try everything they can - replacing DVR, replacing cabling everything. Still no good. Totally incompetent.

I ask for those 2 months in credit for my TV service, and they refuse. I canceled my TV service on the spot, of course. Nice customer service.

Then my internet starts bogging down to practically 56k speeds during the evening. It takes me nearly 8 months of calling, pestering, and complaining before someone FINALLY notices that the hub node in my area is way over-booked. They split the node and things are okay for about 5 months. Then Time Warner, as of about a month ago, starts having HTTP issues. It's not total routing (Steam continues to work just fine!) but I cannot access anything over the web. It still happens. They're clueless, and they don't care.

I understand the economics involved in the ISPs - the problem is that once they get their monopoly, their service goes in the shitter. I would switch away from Time Warner in an instant if there were ANY other reasonable broadband option in West Los Angeles. One of the biggest economies in the world, and we can't even get fiber here. Amazing.

Then you propose extermination

[SuperKendall]

Existence of rampant corruption is is not a reason to discard economic theories... Get rid of the corruption and try again.

So your proposal is to eliminate all human life, for as long as you have humans by any definition of "human" we have now, you will have corruption.

If you want to eliminate rampant corruption, you should try compartmentalizing the potential damage from the corruption of one person, and that means elimination of central planning where power naturally coaleses into the hands of a few.

Any other notion of merely "eliminating corruption" by pretending any group of humans can be trained to not be corrupt - well that's just a fantasy that ignores all of human history and observation.

Re: A lot more research, dood

[sgt_doom]

Talking points, talking points, talking points. Blah...blah...blah...yada...yada...yada!!

Cut the crapola, already, you don't sound even moderately educated when you repeat the mindless corporate blather. The list of colossal financial fraud is most obvious: Commodity Futures Modernization Act, InterContinentalExchange (And Ice Futures, formerly International Petroleum Exchange), SwapsWire, Markit (which later purchased SwapsWire, renaming it MarkitWire, collusion of Standard and Poor with the Bush Administration's lackeys at the Office of the Comptroller for the Currency, etc., etc., etc.

Read the Air Transport Association's excellent report on the oil/energy speculation.

Study the uses of offshore finance centers in the area of "money laundering" and why fewer and fewer taxes paid by the corpations in America and Europe have corrosive effects everywhere. Read, study and learn. Ignorance can be cured, stupidity....doubtful.

Good central planning worked during WWII with FDR, and had he passed all his programs it would have worked even better. Had JFK not been assassinated by Dulles/Bush/Harriman gang, things would definitely be different today.

Stimulate my what?

[Larryish]

The stimulus plan will go the way of the last cash-injection-for-infrastructure... it will disappear down a lot of corporate rabbit holes and the U.S. will still have substandard broadband.

I wonder if we will receive any disclosure as to the recipients, or will it be another "disappearing money" trick like the $700 billion shenanigans.

economic theories and corruption

[reiisi]

I know what you mean, but in this case many of the theorists are promoting theories that allow their brand of corruption.

you are not living in a vaccuum

[aepervius]

Despite whatever economic propaganda you might subscribe to, there is always a "socialist/wealth redistribution" component in the most stable society, a redistribution of wealth from the richest to the poorest, and yes, you can see that as a punishment for your success to reward the loss of other. Society which do not do that, create a split between the poorest (which will tend never to accumulate wealth, live day to day and are at the mercy of any conjuncture change, loss of job etc...) and the richest. Once this gap increase beyond a point where the strain on the society are too much, you know what happens ? Societal breakdown. Possibly followed by civil war and / or revolt/revolution. And at THAT point, you will regret bitterly not having given enough from the richest most successful to the poorest, when you are put in a guillotine or put to the wall. In other word it is in your interest to share a bit of your success, to make sure you KEEP being successful (and alive). Now call me a kook if you want, but I tend to keep my eye open to the truism "the truly desperate has nothing to lose". The successful instead has everything to lose. Keep that in mind next time you grumble you don't want to share your success.

No data?

[Blairius]

What data are they looking for? Most of the broadband data can be found easily on the annual reports of the publicly traded ISPs. The actual customer counts have always been something ISPs have publicly bragged about. It seems like there are several sources for the data if they want to look for it. Internet usage is prone to fashion and trends so any spending should just be based on dumb fast reliable pipes to as many people as possible.