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WSJ Says Gov't Money Injection Won't Help Broadband
olddotter writes "According to the WSJ, The US government is about to spend $10 Billion to make little difference in US broadband services: 'More fundamentally, nothing in the legislation would address the key reason that the US lags so far behind other countries. This is that there is an effective broadband duopoly in the US, with most communities able to choose only between one cable company and one telecom carrier. It's this lack of competition, blessed by national, state and local politicians, that keeps prices up and services down.' Get ready for USDA certified Grade A broadband."
So the WSJ, viewed by slashdotters as a heavily conservative news source, is advocating a position that most slashdotters agree with?
Head explosions commencing in 3...2...1...
"As God is my witness, I thought turkeys could fly." A. Carlson
Of course they do. The Wall Street Journal is a temple of supply-side economics. According to them, the government can't do anything right, except cut capital gains taxes. I would have been very surprised if they'd had anything good to say about this bill.
They don't think government can help with anything.
Do you think the government issuing franchises that creates monopolies backed by the power of the state has helped?
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
The article does a poor job of identifying two separate problems: rural areas with no broadband vs all other US areas with crappy and overpriced broadband. We need to solve both problems, and the WSJ article doesn't offer a real answer to either, so the main point of the article appears to have been to whine about the stimulus package.
The problem is that local governments (municipalities, primarily) have signed exclusive agreements with these companies. Because laying wires requires approval of each municipality, installing new infrastructure literally requires tens of thousands of permits, applications, meetings, etc., to get anything worthwhile installed. Our "marble cake" form of government, creates a tangled mess of conflicting rules and legislation that create such a high cost to enter the market that $10 billion could easily be spent just negotiating. That money will largely dissipate the same way it vanished in Iraq -- because everyone believes they deserve part of the pie.
If you want options, two things need to happen. First, the infrastructure -- that is, the wires that carry the data, need to be owned and operated by an entity separate from the users of that system, and that exclusive contracts be ended immediately. Secondly, we need to eliminate municipality-level and move it to at least the county level. The fewer people that have a voice in the process, the less resources wasted dealing with them. Because city-level employees are amongst the most petty, corrupt, and difficult to work with of any class of government official in the Union.
#fuckbeta #iamslashdot #dicemustdie
Man, that would be so awesome, to have a separate phone and cable company. I would have two places I could get internet service from, instead of one!
If corporations are people, aren't stockholders guilty of slavery?
The way to stimulate the economy is to get the banks lending [slashdot.org] again and get consumers spending again.
Ah, the hair of the dog. Wasn't it poor lending standards and people living beyond their means (i.e: greed on everyone's part) that got us into this mess? Just once I'd like to hear somebody talking about people needing to save in addition to talking about them needing to spend....
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
What, they have a point. If companies were competing freely, instead of this messed up system of little fiefdoms we have now, you can bet that you'd see Comcast and Time Warner trying to outdo each other, while AT&T and Verizon raced to shove fiber everywhere. Remember - competition is good for the consumer. It forces companies to innovate or die, while keeping prices low.
But as it stands now, you basically have "The cable company" or "The phone company". Even independent DSL providers are still using the copper run by The Phone Company, and often costs more than if you got DSL from them directly.
Even the Economist points out that this stimulus package probably won't have the effect Obama is hoping for because the companies will simply sit back and wait for the government to pay them for the upgrades they would have had to pay for themselves.
The way I see it, the only way things will change is through good old capitalist competition. Someone needs to really step in with a reliable WiMAX solution for about $25/mo, and seriously start sucking business away from the DSL/Cable duopolies. In fact I'm rather surprised the cell phone companies aren't trying to jump into the residential data market. They already have the little notebook dongles, just shove that into an antenna you set on your roof (for better reception) and plug it into your router. Better yet, offer residential phone service over this as well, and really put a dent in the landline and cable telephony companies.
You think that a non-governmental for profit company is going to take a massive guaranteed permanent loss to give Joe Redneck in the sticks a 20mb/s connection?
why not? they did it with the copper wires for phone. and last I checked, 4 pair Fiber was cheaper than 4 pair copper.
Oh and laying copper costs EXACTLY THE SAME as laying fiber.
If they could get off their asses in the 60's and 70'stio lay the copper then they can get off their overpaid asses and lay the fiber or upgraded copper. Honestly moving telcos from a regulated agency that had to do things the Govt said to unregulated caused more issues than anything.
Right now they all care only about maximizing profits. They dont give a flying rats ass about the customer or future.. If they could cut 90% of their infrastructure and charge the difference to the 10% in the big cities and tell all rural people to go to hell they would do it in a heartbeat.
The only thing keeping telcos from telling most of america to "GO AWAY" is government regulations.
Do not look at laser with remaining good eye.
We already paid $200 billion for a nation wide fiber optics network that never delivered. When is anyone going to ask what happened to all that money?
We paid for nation wide fiber optics, and it never got delivered. The telcos should give us our money back, all of it. If they can't afford it, go bankrupt, get nationalized, and let someone competent take over. Oh, and send the execs who squandered it all to jail.
Not one red cent should go to the telcos until they pay back what we're owed.
Give me Classic Slashdot or give me death!
I wish Australia would "lag behind" like the US, maybe then we could get almost unlimited download quotas too.
Sure compared to technology heaven like Japan it might seem like you're lagging behind, most of the world is probably lagging right there with you.
But you're far from the worst off.
"we've got trenchcoats and bad attitudes" - John Constantine, HellBlazer
In other words, the liberal or conservative stance in American politics is a false dichotomy.
"Anything tastes good if you deep fry it."
the reason the usa lags behind other countries is that the other countries are small, compact and densely populated. like korea, or any european country
if you were to examine say, new york and new england, alone, or california, alone, the usa does fine in broadbrand penetration. but the usa is still sparsely populated in vast rural areas in the middle
want proof? look at canada. canada obviously has different governmental mechanisms, but it has virtually the same digital access ratings as the usa:
http://www.internetworldstats.com/list3.htm#dai
broadband penetration has to do with only two factors:
1. how rich the country is
2. population density
all other factors, including government policy, are neglible in comparison
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
This massive injection of money, which is being obtained through printing money and borrowing, will not fix the core problems that caused this mess, namely:
All this talk about need more credit and more lending is a red herring. Over-consumption and over-spending is what got us into this mess in the first place. The US$1.5 trillion would be better spent buying up bad mortgages or just giving an equal share to every legal resident in the U.S. than what they are doing with it.
This will only put off the inevitable correction (crash), and it when it does happen, and it will, it will be even worse.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
Yes, because the way to get out of a 10 foot deep hole that is filling with water is to dig deeper.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
A government mandated monopoly whose goal is to maximize private profit is a whole lot different than a government administered network whose goal is public service.
Give me Classic Slashdot or give me death!
I am unsure about the rest of /. but for me 2009 is the year of 'No Debt'. I've made it my goal to obliterate as much of my personal credit debt as possible. No more use of the magic plastic, and by the end of February, I'm gonna pay off one card entirely and possibly have the second card near paid by the end of May. I'm not going to list specifics of my debt as it is embarassing that I let it happen to me. No more though, if I can't buy it with cash (or debit card as I am a small guy and carrying cash makes me paranoid), then I don't need it now and can do without for a while.
Sorry for getting off topic, but I figure if I kill off my debt, save up my cash to give an emergency buffer and can still once a paycheck afford a nice steak dinner, I should be happy. The 'I need it now' mentality, almost killed me here.
I guess what I'm getting at is this 'Gotta have it now!' mentality and the illusion of easy money got more than just me into trouble with money.
"Quote me as saying I was mis-quoted." -Groucho Marx
You may not agree with their economic policies, but they have a point here. There has been a lot of fraud, waste and abuse in the use of the funds from the universal service fund that was set up to subsidize rural communications. Chances are, this $10B would just go into the money pit and end up padding the pockets of the major telecoms rather than being pumped directly into infrastructure development.
If you want to see a real change, then get rid of the franchising laws. If the federal government could help the railroads deal with local and state laws in the 19th century, it can do so today with franchising laws that restrict access to these markets.
There, I'll bet you never thought a conservative-libertarian would champion federal intervention.
You cant really call it overpriced if people are buying it.
That argument doesn't really work in a monopoly. For instance, when AT&T was broken up, nearly everyone in the US already had phone service, and yet prices came down. It's hard to argue that AT&T monopoly phone service wasn't "overpriced". At the very least, it illustrates how hard it is to determine a fair price in the absence of competition.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
really? where have you been hiding..
Lenders began to offer more and more loans to higher-risk borrowers, including illegal immigrants. Subprime mortgages amounted to $35 billion (5% of total originations) in 1994, 9% in 1996, $160 billion (13%) in 1999,and $600 billion (20%) in 2006.
A study by the Federal Reserve found that the average difference between subprime and prime mortgage interest rates (the "subprime markup") declined from 280 basis points in 2001, to 130 basis points in 2007. In other words, the risk premium required by lenders to offer a subprime loan declined. This occurred even though the credit ratings of subprime borrowers, and the characteristics of subprime loans, both declined during the 2001-2006 period, which should have had the opposite effect.
In 1995, the GSEs began receiving government incentive payments for purchasing mortgage backed securities which included loans to low income borrowers. Thus began the involvement of the GSE with the subprime market.[105] Subprime mortgage originations rose by 25% per year between 1994 and 2003
--
from wiki
"Ahh! Arrogance and stupidity in the same package, how efficient of you!" --Londo Molari
And if you happen to live in an area that isn't profitable to run service to I suppose you should just move then, right?
Yes. Just because you want the benefits of living further from other people, don't expect me to subsidize the costs that decision incurs.
If I'm charging $50 per ounce for onions and I'm the only source of onions in a city and getting an "onion reseller license" ("building infrastructure") is really expensive (but I got mine since I used to runt the government-owned onion store wouldn't you say that my onions are overpriced?
And good luck trying to boycott someone who's got a regional monopoly, that's like when guys complain about always having to make the first move and some woman says "well why don't you guys get together and stop hitting on women? then we'd have to hit on you guys.", any sane person understands that it doesn't work.
/Mikael
(Why do I even bother replying to AC trolls?)
Greylisting is to SMTP as NAT is to IPv4
Here's a wild idea.
We need a decent rail system in the US, we have trackbeds all over the place in bad shape. Railroads ran through almost every major town. Take the trackbeds, fix them up for a new rail system. While that's being done, since you're digging up anyway, lay new commuinication cables to each town alongside the rail bed. Now you've pretty much addressed broadband and rail transportation at the same time.
Last mile can be handled either through local cables that the town can build out, OR wireless broadcasts at the railroad stations and using the local post offices as repeaters.
There, federal rail, and unified communication. Oh, and don't let the NRPC or the USPS run this, they have enough problems.
I think the "authority" model might work. Let a local authority handle the connection to the home, just as they do with water, sewer, etc. Then allow you to utilize the data pipe in any way you wish - select from any ISP willing to hook up to the authority. This way it would be up to the local authority how to best connect each home... fiber, copper, even over-the-air. When it comes to these hookups to the home, you can't have unbridled competition... so why do we pretend?
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Of course WSJ says this.
They doctrinally believe, and are paid to amplify the message that the ills of the world can be cured by giving a free hand to the same people responsible for the global financial collapse.
"Flyin' in just a sweet place,
Never been known to fail..."
Why not, the good people of our small towns and countrysides subsidize the ever lasting cycle of inner-city welfare recipients. (The modstick will sting for that one) All joking aside, I used to live in a rural area (northern MN), and there were/are currently no options for broadband (parents and lil bro still on dial-up). If they really wanted or needed it, they would move 15-20 miles and live near the "city" (population still less than 3k). If a demand is created, a business that wants a profit will swoop in to fill that demand, as always, for a price.
"A claim for equality of material position can be met only by a government with totalitarian powers." Hayek
Of course they do. The Wall Street Journal is a temple of supply-side economics. According to them, the government can't do anything right, except cut capital gains taxes. I would have been very surprised if they'd had anything good to say about this bill.
So the WSJ is pro-market... that doesn't invalidate their argument. This bill still stinks. Stimulus spending doesn't work the way it's being advertised... it has little to no effect on short term job preservation or creation. While we all need things like roads and bridges, spending tax dollars on roads and bridges does not stimulate the economy in the short term... that money takes too long to percolate through the economy.
Stimlus spending didn't cure the Great Depression, nor did it shake Japan out of it's 90's doldrums. Admirers of the New Deal take great offense at the notion that the New Deal was a failure in reversing the Depression, but even left-leaning historians and economists agree that it was WWII production, not the New Deal, that finally brought us out of the depression. Shouldn't the metric of whether an anti-depression program worked be the elimination of the depression?
Life is hard, and the world is cruel
The terms "left", "right", "liberal", "conservative", and the derived term "centrist" mostly just serve to confuse any attempt at useful political discussion. These terms lump all of politics into two piles of mostly unrelated positions on mostly irrelevant topics.
In the United States, the absolute biggest political issue at the federal level should be the reduction of military expenditures. We've been spending a third of our tax revenue bombing civilians and maintaining major bases in many different foreign countries. We've never been able to afford this foolishness, and we certainly can't afford it now.
But "left" and "right" doesn't help on that at all. The mainstream "left" and "right" both consistently raise our military spending. The "far left" and "far right" completely agree: this military spending needs to be cut.
Isn't it suspect that in our mainstream political discussion there isn't even a single *term* for a group that wants to reduce our military back down to a reasonable size? It's the "extremist crazies" who want that, called by the same terms as "skinheads" and "hippie terrorist sympathizers".
-- The act of censorship is always worse than whatever is being censored. Always.
Better question: Why do you bother signing your posts when your username is at the top anyhow?
Oddly enough, most so-called "conservatives" today are actually from what, classically, is the center of the political spectrum. It just doesn't look that way because so much of the major media outlets are hard-core lefties claiming that they are the "center."
Actually, both American political parties are what most of the rest of the world would call right wing parties. Just a few examples: neither party argues against unfettered capitalism (although you're starting to hear some from the public after the events of the last six months), neither party argues against massive military spending, neither party argues for gay marriage, and neither party argues for more liberal drug laws.
You may honestly believe that the country is in the hands of left wing lunatics, but let me assure you that, by international standards, neither the Democrats nor the Republicans are left wing.
I came here for a good argument
Okay, if you wanted broadband in a village, I would understand. But how would distance affect a densly populated downtown area. Densly populated area in US are no better off than sparsly populated areas
My Aurora : http://www.youtube.com/watch?v=o91ZsGwJYyg
FB : https://www.facebook.com/TanveersPhotography
"One said screams that we need to regulate everything and have the government put everything in order so that everything works one way.
The other side screams that we need to degregulate everything and let companies do what they want to do in order to make more money."
Straw man.
One side says deregulate everything, that government is incapable of doing good, that only business, unencumbered by anything other than the profit motive, can solve problems. That is the right, who call themselves conservative. That truly IS the definition of the right, of Bushism, of Reaganism, of Limbaughism.
And there is everyone else, whom the conservatives call "liberals". And not a one, not a solitary, single, identifiable human-unit of those "liberals" has ever said the government needs to control everything so that everything works one way. Not even communists, should you find the odd one in a coffee shop, would say such a thing.
Your other points are well made. The problem with the argument is the above, because you are letting the right define the terms. No such opponent to the right exists. Our "left" is so far to the right that we can barely find money to buy textbooks. We won't even build schools anymore, for such activity is socialistic. Such cash was cut from the stimulus fund because Republicans find it so.
We had - emphasis *had* - government licensed monopoly in cable TV franchises for two simple reasons. First, it was damned expensive to drop cable to American homes, and no company wanted to do it if another company were to drop cable down as well, causing competition. They impressed upon localities to regulate things so they could make a nice profit by making sure individual companies were gifted with exclusive zones of coverage. Some gimmes like public access and a standard package of broadcast TV was included, and we were off. I was there, I remember.
Secondly, because of *deregulation*, NOT regulation, the cable companies started to absorb each other and formed powerful monopolies of their own design. The few real competing cable companies were ruthlessly forced out of business by underpriced services or being bought outright.
We have a duopoly because, after we collectively decided to open the business up to competition, over the EXTREMELY VOCIFEROUS objections, both vocal and campaign-contribution-wise of the cable companies, we let the telcos in to play. And then let AT&T reform after so agonizingly breaking them up. So now, thanks to dereg, we have two real players left. And they are cutting up the pie according to their own internal profit lines, making enough money to buy god.
Can you imagine how much roads would cost if we had built them up this way, rather than competitive contracts according to government (ie people-driven) specs? Ever tote up how much our "free" market internet has cost us as consumers? Vs. how much it would have cost had a federal plan simply dropped the fiber to every house - once and for all, and let a price controlled, competitive bid system decide who provided the internet access itself?
This would be only if you consider the rest of the world as consisting of only of Western Europe and Canada. Once you REALLY take in the rest of the world with people who are generally more conservative (Middle East, East Asia, etc.) it becomes apparently that America really is pretty centered relative to "the rest of the world."
The mortgage industry hardly ever had a free hand. When you have government assuming significant risk by guaranteeing loans, you don't have the necessary risk vs reward considerations that keeps markets healthy. So yes, the government was complicit but hardly the only ones to blame. You do have companies and individuals that took advantage of the situation to increase profit. You also have individuals that took advantage of the situation to get more home than they could afford. There is plenty of blame to go around. What I think is funny now is that you had unsustainable deficit spending by consumers that lead to unsustainable economic growth. That bubble has burst. To fix it we are now going to inject unsustainable deficit spending by the government. What a laugh!
"Written on the pages is the answer to the never ending story..."
Offered at a price they're unwilling to pay?
Verizon wanted $24,500 to run 1.1 miles of cable to my house. There is no way I can afford that, and my neighbors who are making $20,000 a year working on a farm are never going to afford it.
Oh, I'm sorry, you were referring to satellite or wireless, not actual broadband. Both have such high latency that they are useless for games or VOIP, and such slow download speeds that they are worthless for anything besides email. If it's rainy, cloudy, or overcast you can bet that you'll only be getting about twice dial up speeds. Even better, the local monopoly on wireless runs an unbelievably shitty service. Downtimes are frequent and can last 24 hours or more.
Give me this ten billion (or even a fraction of it), and I'd set up locally owned cooperatives (max size 2-3 DSLAMs) that split the cost of operating directly amongst their members. Government subsidies would be necessary only for initial purchase of the backbones, workers (and policies like packet prioritization) would be elected on a short-term basis, and I'd have a 24 hour help-desk set up that would provide support for every coop in the state. A non-profit business could provide good competition to the big telcos while avoiding the problems brought up here about a government run service.
Obligatory Soundbite Catchphrase
From TFA:
Firstly, note the loaded language, with words like "controversial" and "radical". The bias is obvious. It implies that anyone who would have the audacity to believe that our main information arteries should not be throttled and/or censored is some kind of unrealistic dreamer. Never mind that this openness itself has been the primary reason why the internet has been such a success. Without the internet, we'd be paying exorbitant sums for proprietary services such as AOL. Their bias is short sighted, shallow, and mechanical.
The idea that competition will solve all of our problems in regards to the internet is a fallacy. Network access will always be a monopoly/duopoly or and oligopoly. The idea that the network business could actually sustain enough market players to allow true competition is laughable. And they know it. Other countries that have better network infrastructures have highly regulated duopolies/oligopolies, with strong enforcement of the regulations. The market players in other countries know that if they abuse their monopoly power, they will be punished. Their apparent bias against net-neutrality indicates they are likely against other regulations too.
I would argue that internet access can be helped by "competition", but that such competition will in actuality be a highly regulated oligarchy. As soon as the regulations disappear, the system will break, and the oligarchy players will show their true colors, charging whatever the market will bear for as bad a service as possible. The Wall Street Journal is hypocritical for promoting competition, when they surely must know that true competition is impossible in this industry.
This and no other is the root from which a tyrant springs; when first he appears as a protector - Plato (423 to 327 BC)