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

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.

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: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.

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.