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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."
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.
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...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).
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
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.
It's time to start lobbying for an internet question (or two) on the census.
.. 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.
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.
(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.
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.
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.
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.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
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.
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:
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.
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.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
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.
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.
See the SEC reports, consumers are paying, providers are profiting. Reality trumps theory.
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.
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.
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.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
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.
C. Sagan : A demon haunted world:
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