FCC's Broadband Plan May Cost You Money

At ten minutes past midnight the FCC released their National Broadband Plan. Judging by the available coverage, few reporters spent the night poring over it. The BBC at least posted something in the morning hours, but it quotes Enderle, so that gives you some idea of its sourcing. Business Week notes the plan's cool (not to say frigid) reception among broadcasters. Dave Burstein of FastNet News did some real digging. His take as of 4:00 am Eastern time is that the plan will cost most Americans money, and won't provide much if any relief to the poor. We'll see many more details and nuances emerge over the day. Update: 03/16 19:53 GMT by KD : The FCC plan (PDF) is here.

Comments

Wow, there's a shock!

[Anonymous Coward]

The government tries to "help" and only ends up costing taxpayers money without really solving the problem they don't have the business solving in the first place.

Re:Wow, there's a shock!

[mcgrew]

"I'm hear from the public school system, I'm hear to help". Do you here me now?

Re:Wow, there's a shock!

[tbannist]

Yeah! I mean, just look at what the lack of building codes has done for Haiti!

Sure, the earthquake that hit Chile was 500 times stronger than the Haiti one, and sure the stricter building codes in Chile meant only 500 people died rather than 300,000, but that's no reason to trade liberty for security.

Governments never reduce costs

[dogmatixpsych]

Of course it will cost us money. Any time the "government" says they can do something at zero net cost, you know they are either lying or unreasonably optimistic. That is one of the rules of government spending - it always costs more than stated. A $750 billion stimulus will not cost $750 billion, it will cost $1 trillion. A $3 million bridge will cost $4 million. A 'brief' war will cost 5X what you think it will.

You may or may not like big businesses but businesses are usually very good at reducing costs, governments are not (the reason that isn't true with ISPs or cable companies is because they don't have any competition - most people live where there is a de facto ISP monopoly). I don't know why so many people - Republicans and Democrats and Independents - want the government to do more and spend more for us.

Re:Governments never reduce costs

[TheKidWho]

Yes, except the entire purpose of a corporation is to turn a profit, social welfare be damned. If hooking up Internet to those 10 people living away from society isn't going to turn us a profit, then we'll be damned if we're going to hook them up! The Federal Government on the other hand has more at stake with regards to the welfare of society and making sure that interstate commerce is working smoothly.

There are certain jobs that only the government can do well, and there are many others that the government should have absolutely no role in. The problem with government spending is that everything goes by a middle of the road scenario when it comes to cost estimation, however these kinds of large scale projects always become more complicated then it initially seems and costs rise.

Re:Governments never reduce costs

[Attila Dimedici]

Someone missed out on hearing that in economics "cost" is in principle, not monetary. "Cost" includes, but is not solely monetary cost.

It is zero "net cost" from the government's POV since the total (economic) revenues at least cover the total (economic) costs.

Except that isn't true. It is zero "net cost" from the government's POV since the "cost" of voter anger is less than the gain in power. When the government starts justifying some action on the basis of cost, you can be almost certain that it is something the government shouldn't be doing and that the taxpayer is going to get hosed.

Re:Governments never reduce costs

[Akido37]

The Federal Government on the other hand has more at stake with regards to the welfare of society and making sure that interstate commerce is working smoothly. There are certain jobs that only the government can do well, and there are many others that the government should have absolutely no role in.

Amen. This is why the Federal Government is mandated to run the Post Office. At the dawn of the Republic, no intelligent businessman would operate such a money-losing enterprise. However, it is a necessary and needed service.

Rural electrification and rural broadband, in my opinion, also merit Government intervention.

Re:Governments never reduce costs

[mcgrew]

It depends on the government and the business. In a free market, business almost always does save the customer money. In a natural monopoly like utilities, roads, bridges, etc, you're going to pay through the nose if privately owned.

An example is two electric companies, CWLP and Amerin here in Illinois. Amerin's rates are far higher than CWLP's, who provide the cheapest power in the state. Amerin's customer service is abysmal, CWLP's is excellent. When two F-2 (almost F-3) tornados tore through CWLP-served Springfield, we had power restored in our devastated neighborhood in a week; houses that had their roofs impaled by their neighbors' roofs had electricity back long before the roof was fixed, and the electrical infrastructure was completely destroyed, requiring replacement of every pole, wire, and transformer. When a weak F1 passed through Amerin-served Cahokia across the river from St Louis, my friend Jeff was without power for over a month. I visited him a week after his tornado, and the only evidence one had gone through was his lack of electricity.

To paraphrase Lilly Tomlin's "Ernestine", "We're the electric company. We don't HAVE to." Amerin is only beholden to its stockholders, since their customers have no other choice for electricity. OTOH if CWLP's service is bad, the Mayor loses his job; the customers/citizens own CWKP.

CWLP not only doesn't use tax money, it actually turns a profit for the city, keeping taxes lower. Since my experience with the tornados, I've advocated that all utilities be taken over by city and county governments. Keep government out of construction and fast food, but do away with private-owned utilities. A monopoly doesn't follow free market rules.

Re:Socialist internetz

[rcoxdav]

As an atheist who lives in rural Illinois, where there are plenty of bible thumpers, I would be happy to have a much faster internet connection. It would also hopefully educate the uneducated masses here about such evil sites like the pandas thumb which would help them become less thumperish.

Government Services

[Akido37]

The Government provides a service - in this case, asking/forcing someone else to provide a service - and people are shocked that it will cost money? What kind of Communist paradise do these people live in where Government doesn't cost anything?


Everybody wants services (public schools, Medicare, military, etc), nobody wants to pay taxes.

Rural areas

[Anonymous Coward]

Consider that wiring urbanized areas is quite straightforward due to the availability of labour as well as the preexisting infrastructure. Wiring rural areas is a tough task, where often services are provided for an outright financial loss. Even in countries such as New Zealand where the enlongated geography and coastal towns mean that in principle there is only a short distance for cable to run, laying infrequently used cable in remote areas makes it unattractive.

In such cases broadcasters ought to accommodate wireless services, and probably a good argument can be made for compulsory acquisition of airwaves.

State run telecoms are AWESOME

[Neuticle]

Having lived in and visited countries with largely state-run telecom industry and then come home to the USA, I think it should be painfully obvious to all that government does not do a good job at running telecommunications. I know this isn't an attempt at running a telecom, but it sounds like they are going to screw the pooch just by trying to influence the market. The power of the FCC to f-things up is just that immense.

And I'm going to punch the next person that tells me "Broadband is a right". The hell it is. It is a good, a service that must be paid for, same as healthcare. You can not have a right to something that is non-free. Now I'm open to discussion on whether the state should pay for people to have a certain good, but see the above on how well states run telecoms.

Re:State run telecoms are AWESOME

[vlm]

And I'm going to punch the next person that tells me "Broadband is a right". The hell it is. It is a good, a service that must be paid for, same as healthcare.

There are some regulatory hassles, but pretty much anyone can buy land and build a dr office on it.

On the other hand, I can't think of any broadband provider who does not have easements to steal the use of property, a government granted monopoly to sell in a market, or use the public's wireless spectrum for private profit, or simply sponge off/resell someone else whom does so.

That's the difference. Broadband is not a free market by any means so its pointless to pretend that it is. Take Take Take from the public, the least the public should ask for is universal service and a nicely regulated price. If the drooling masses want to dramatically simplify that to "broadband is a right" that's more or less close enough.

You can not have a right to something that is non-free.

Like free speech, or equal protection under the law, or not quartering soldiers in private homes without the owner's consent? That's expensive compared the alternatives, but our ancestors decided the costs were worth it. You can always move to Somalia if you think that would be a paradise on earth.

Re:State run telecoms are AWESOME

[Jawn98685]

Having lived in and visited countries with largely state-run telecom industry and then come home to the USA, I think it should be painfully obvious to all that government does not do a good job at running telecommunications. I know this isn't an attempt at running a telecom, but it sounds like they are going to screw the pooch just by trying to influence the market. The power of the FCC to f-things up is just that immense.

And I'm going to punch the next person that tells me "Broadband is a right". The hell it is. It is a good, a service that must be paid for, same as healthcare. You can not have a right to something that is non-free. Now I'm open to discussion on whether the state should pay for people to have a certain good, but see the above on how well states run telecoms.

Erm..., you've got it wrong. In parts of the U.S. the electrical (and other) utilities are operated by a government entity, a "public utility district" or P.U.D. In other places, the electrical utilities, at least, are run by profiteers. Guess which system works better? And by better, we mean cheaper, more reliable, and of higher quality. That's right, all of the above. The reason for this is simple - accountability. In a marketplace that defines a natural monopoly, the mythical "invisible hand" of market economics is, de facto, not in play. Consumers can't shop for a better deal and, not being share holders, have no other influence on the provider. The P.U.D. customer, on the other hand, has the equivalent of share holder status. He/she has a vote that will elect the officials who will run the "company". The officials' jobs are tied to the customers' satisfaction above all else. And guess what? It works.

So why should telecom be any different? Socialize the ownership and operation of the infrastructure, and let the market, now open to all via that infrastructure, determine what sells and what doesn't.

Re:Socialist internetz

[bsDaemon]

If there is one thing that the internet helps, its ensuring that no one ever has to find this out if they don't want to. If someone only watches Fox News, listens to talk radio and reads the WSJ in print, all they're likely to do is add foxnews.com, redstate.com and/or stormfront.org ("white nationalist" forum) to their reading list, group up with more and more people who agree with them, then eventually find Alex Jones and then its over. The same thing can be said of the person who doesn't watch anything but PBS news, listens to NPR and reads nothing but the New York Times... or the people reading Daily Worker or whatever.

The internet, for most people, really just helps to ensure that they never have to step outside of their comfort zone insofar as information is concerned. Once they've "discovered" so many comforting sources, then it'll just legitimize their entire world view, solidify everything in their mind, give them comfort in the virtual crowd and make them even more dangerous. I have first hand experience with this myself, and I had to drop off for a while and go read real books, multiple media sources, etc, to ensure that I gave myself a well-rounded view of things again and got back towards normal.

Don't get me wrong, I love the internet -- it makes my life a lot easier, provides the infrastructure within which I make my living, allows me to keep up with friends from high school and college, and get information from all over the world whenever I want it. But for a very large subset of the population on either side of an issue, all its going to do is help entrench their views and help them think "look at all these people who are saying what i've been saying for years! what's wrong with people who can't see what I see?! It's all right there, on the internet!" But, as a poster said above, Democracy has drawbacks. This is one of them.

Isn't this just a LITTLE premature?

[debrisslider]

So the text has been out for several hours and this guy flipped through it (you can't honestly read 357 pages of children's fiction in that time, let alone government policy) enough to find a few stated ideas for taxes, and all of a sudden it's a net loss for consumers? When are those taxes going to take effect, and what is the inflation-adjusted amount in today's dollars? It's a lot easier to suggest taxes than to try and tell congress how to budget or regulate companies, so this statement of policy cannot honestly take into account any kind of subsidy that might be dreamed up by congress (save your complaints about how taxes pay for that, that's not the kind of cost we're talking about), nor any kind of price regulations that would decrease charges. A substantial part of the plan is supposed to be paid for by auctioning another part of the broadcast spectrum, and there's no way of knowing anything other than a ballpark estimate for that amount. It's not like this is anything other than the first public rough draft; items will change and funding will be battled over every day until the relevant budgets are passed.

Last Mile

[rlp]

Here's what I would do: cities and towns provide the infrastructure for the last mile. They connect fiber to homes, schools, and businesses and run it to a neighborhood hub. In rural areas, counties could build towers for 4G wireless. Then the big carriers would connect to the hubs (multiple carriers per hub for maximum competition) and charge for service. Local government would be responsible for deploying and maintaining last mile service, private carriers would compete to supply internet connections and other services (telecomm, video) at the best possible prices. Of course, I don't expect any of this to actually happen ...

Re:Last Mile

[ducomputergeek]

Exactly, it should be the LOCAL governments that do this. If the local city/county wanted to pass a bond or even a sales tax increase to pay for it, I would vote for it. Especially since it's a lot easier to vote that lot out of office if they don't deliver than it is the people inside the Beltway.

Re:What about the backbones and the servers?

[GaryOlson]

The same argument was used when the US Interstate highway system was built decades ago. We already had highways linking the various major cities; why do we need these big limited access highways? Decades ago when the first bypass Interstate highways were built in the middle of open county around metro areas the discussions were equally argumentative -- who would ever need such a highway? Who would provide services for travelers on these roads?

Decades may be required before the average person needs 100Mbps. And some of the original architecture and 100Mbps equipment will fail to meet future needs [ analogy attempt: compare a cloverleaf intersection in Ohio with the newly built High Five intersection in Dallas]

One of the functions of government is to provide very long term goals and infrastructure measured in decades which private industry cannot meet -- and which most people cannot comprehend.

Re:Socialist internetz

[commodore64_love]

A Republic with Laws to protect individual rights is superior to a Tyranny of the majority (democracy).

dogmatixpsych never reads

[copponex]

Privatization! All the same mistakes the government makes, plus the cost of profits, administrative overhead, plain old greed, no transparency, and no incentive to make things right.

The Pentagon’s reliance on outside contractors in Iraq is proportionately far larger than in any previous conflict, and it has fueled charges that this outsourcing has led to overbilling, fraud and shoddy and unsafe work that has endangered and even killed American troops. The role of armed security contractors has also raised new legal and political questions about whether the United States has become too dependent on private armed forces on the 21st-century battlefield...

“This is unprecedented,” [Charles Tiefer] added. “It was considered an all-out imperative by the administration to keep troop levels low, particularly in the beginning of the war, and one way that was done was to shift money and manpower to contractors. But that has exposed the military to greater risks from contractor waste and abuse.”

http://www.nytimes.com/2008/08/12/washington/12contractors.html

"Right now the government is paying health insurance plans that administer Medicare Advantage, on average, 12 percent more per person than it spends on patients enrolled in traditional Medicare," said AMA Board Member Cecil Wilson, MD. "With Medicare payments to doctors who care for seniors slated for a 10 percent cut next year, Congress must put the money used to subsidize the insurance industry to better use."

At the AMA's Annual Meeting late last month, America's physicians sent a resounding message to Congress - eliminate the Medicare Advantage subsidy. AMA policy clearly states that subsidies to private plans offering alternative coverage to Medicare beneficiaries should be eliminated, and that these private Medicare plans should compete with the regular Medicare program on a fiscally neutral basis.

"While groups that truly represent physicians fight to preserve all seniors' access to health care by stopping Medicare physician payment cuts, the insurance industry and its partners are solely focused on preserving their $65 billion government subsidy," said Dr. Wilson.

http://www.medicalnewstoday.com/articles/76805.php

Engineers hired to investigate the cause of September's massive Big Dig tunnel leak have discovered that the project is riddled with hundreds of leaks that are pouring millions of gallons of water into the $14.6 billion tunnel system.

While none of the leaks is as large as the fissure that snarled traffic for miles on Interstate 93 northbound in September, the breaches appear to permeate the subterranean road system, calling into question the quality of construction and managerial oversight provided by Bechtel/Parsons Brinckerhoff on the massive highway project.

Finding and fixing all the leaks will take years, perhaps more than a decade, said Jack K. Lemley, an internationally known consultant hired by the Massachusetts Turnpike Authority to investigate the problem. Just repairing the section of wall where the September leak occurred will take up to two months and require closing of traffic lanes.

The engineers also said they have discovered documents showing that Bechtel managers were aware that the wall breached this fall was deficient from the moment it was built in the late 1990s, yet did not order it replaced and did not inform state officials of the situation.

http://www.boston.com/news/local/articles/2004/11/10/big_dig_found_riddled_with_leaks/

Re:Socialist internetz

[bsDaemon]

I was home visiting my parents over the weekend. My mother is a high school teacher, and sat through Fox and Friends and an hour of "The Cost of Freedom" (the business 'news' block) because she heard a blurb they were going to be talking about 4-day school weeks. They sat and watched, getting rilled up about "obama-care" that entire time (while being pissed off that they get charged $500 a month for insurance for the two of them through my mother's plan. my dad is retired from being an airline captain and now substitute teaches).

I spent the entire time trying to point out that absolutely no information had been imparted, just some stereotypically attractive people talking about bullshit during f&f, and then a bunch of old, rich jews talking about how they'd be even richer if it weren't for obama. When they finally got to the topic she was waiting for, it was 3 minutes of yelling between a Lisa Loeb-wanna-be and some crotchety old bitch, then they moved on to the next thing. My mother felt ripped off, but did she go find actual information? No. Did she do any research as to how this might affect her professionally? No.

I also found my dad's Tea Party t-shirt... I'm not sure I want to go home anymore. And this is coming from a former Ron Paul supporter (I joined the Dems after I fled DC in 2007 and voted for Obama). But I'll be 26 in June and its about time I just grow up and get on with it. My parents used to think I was a crazy right-winger... then Obama comes along and suddenly everything is fucking commie plot and the John Birch Society is defending our freedom... god bless Sarah Palin. Screw that shit.

Re:Socialist internetz

[bsDaemon]

I used to work in DC with very conservative groups, because I grew up in the household I describe, and that's just what I was brought up with. Spend enough time being forced to write propaganda against health care reform by people who don't give their employees health insurance, sick days, or anything else, and it gets to you. Spend enough time being made to write propaganda against labor protection by people who pay you less than $15/hr in a place where the median salary is like $90k or something, while they're driving BMWs, Audis and Aston-Martins to work, and you get really pissed off. I learned first-hand what a bunch of slave-driving hypocrite douche-bags so-called "conservatives" are and have adjusted accordingly. Frankly, its become more about punishing them than it is about improving my own situation at this point. I got back into the private sector and make enough money, plus benefits, etc at this point. But I'll do just about anything to make the Sam Brownbacks of the world feel pain right back.