November 2007 Archives
The Phoenix Center has released a new study that shows the major determinants of broadband deployment in the US to be education and income disparity. The relevant summary is this:
"The study finds substantially higher rates of broadband adoption among those with a college degree and in households with at least one family member in school. For instance, a 10 percent increase in the number of homes with a student present raises broadband subscription by 28.1 percent. Higher income also raises subscription rates significantly, but income inequality reduces subscription-a 10 percent increase in the Gini coefficient of income inequality in a state reduces the level of broadband subscription in that state by about 15 percent.What is important about the Phoenix Center study is not that it reaches new conclusions. The Pew Internet and American Life project has for some time identified both education level and income disparity as major reasons that households might not adopt broadband. So have other studies. But these have largely been survey-based research rather than quantitative research. The Phoenix study supports the work of other respected researchers using numerical data and analysis.
Education and income factors are more significant in explaining broadband adoption than other factors such as population density and the number of rural households. In all, the study finds that demographic and economic factors explain about 91 percent of the disparity in adoption rates from state to state. "All states are not working with the same endowments, thus all states cannot be expected to have the same adoption rates," the study says."
Credible research doesn't grab many headlines, but this study is valuable because it provides a stronger empirical argument for the creation of government programs that will actually spur broadband adoption - education and investment. Those looking for a foundation for a national broadband policy in the US should pay less attention to calls for more government regulation and more attention to the research.
Verizon Wireless announced this morning that it would open its network to all devices and all applications. Here's their news release:
"Verizon Wireless today announced that it will provide customers the option to use, on its nationwide wireless network, wireless devices, software and applications not offered by the company. Verizon Wireless plans to have this new choice available to customers throughout the country by the end of 2008.
In early 2008, the company will publish the technical standards the development community will need to design products to interface with the Verizon Wireless network. Any device that meets the minimum technical standard will be activated on the network. Devices will be tested and approved in a $20 million state-of-the-art testing lab which received an additional investment this year to gear up for the anticipated new demand. Any application the customer chooses will be allowed on these devices.
This new option goes beyond just a change in the design, delivery, purchase and provisioning of wireless devices and applications.
"This is a transformation point in the 20-year history of mass market wireless devices - one which we believe will set the table for the next level of innovation and growth," said Lowell McAdam, Verizon Wireless president and CEO. "Verizon Wireless is not changing our successful retail model, but rather adding an additional retail option for customers looking for a different wireless experience."
Verizon Wireless will continue to provide a full-service offering, from retail stores where customers can shop, to 24/7 customer service and technical support, to an easy-to use handset interface and optimized software applications.
While most Verizon Wireless customers prefer the convenience of full-service, the company is listening through today's announcement to a small but growing number of customers who want another choice without full service.
Both full service and "bring-your-own" customers will have the advantage of using America's most reliable network.
Following publication of technical standards, Verizon Wireless will host a conference to explain the standards and get input from the development community on how to achieve the company's goals for network performance while making it easy for them to deliver devices.
Verizon Wireless has a track record of listening to customers and transforming entrenched industry practices based on those customer needs. The company parted with the industry last year when it introduced pro-rated early termination fees, and in 2004 when it refused to participate in a wireless directory when customers said they didn't want one. Verizon Wireless also broke with "wireless tradition" when it supported local number portability because customers wanted the freedom to take their number if they switched service providers.
Such responsiveness to customers has earned Verizon Wireless' the strongest brand reputation in the industry."
Two thoughts come to mind. First, of course, is kudos to Verizon Wireless for taking a bold step forward to stay competitive in an open marketplace. Even if no other wireless carrier follows suit, consumers can have their choice.
The second is that this must be an embarrassment to those who think that progress can only come through heavy-handed regulation and thuggery. At least in this marketplace, the NNSquad can go back to sleep, Rep. Markey can turn his attention to something more meaningful, and MoveOn.Org can move on.
[Note: In early November, something called "People for Internet Responsibility" launched a new cooperative effort to detect, analyse and report anti-competitive behavior or anything else not specifically requested from ISPs. They call themselves...tada! The NNSquad!]
From the Chronicles of the NNSquad:
"Monday. Spent the whole day monitoring the web to find some evil corporation violating network neutrality. None to be found. Why do the hours go so slowly?"
"Tuesday. Gawd, I am so bored. Won't somebody do something evil so I can don my superhero costume and leap into action? Why doesn't anyone pay attention to me? This is so wrong..."
"Thursday. Petitioned the FCC 50,000 times to pass a new Intergalactic Network Neutrality Regulation. No response. Could it be that they are violating NN by ignoring me? Will send petitions to Congress instead. Maybe someone there will notice me."
"Friday. It's now been five days, and I can't take much more of this. Surely AT&T must be doing some evil somewhere. Or Verizon. Or Comcast. Everyone wants to know when I'll take off this silly cape and come down off of the tower, but I keep thinking that if I look away for just one moment someone will block a web site or something and I'll miss my big chance. Tell Mom I need more peanut butter sandwiches..."
Just for the record, let's recount:
Number of people killed by Network Neutrality Violations = 0
Number of people injured by Network Neutrality Violations = 0
Number of people suffering from Network Neutrality Violations = 0
Number of documented, verifiable Network Neutrality Violations = 0
Number of laws broken involving Network Neutrality Violations = 0
Number of regulations broken involving Network Neutrality Violations = 0
Mom always told me not to make fun of others, but at some point you have to just look at these arrogant, self-appointed vigilantes and sigh. The Internet has a host of problems that desperately cry out for solutions. But we won't get there by mob rule and vigilante lynchings, particularly over issues that have yet to be clearly defined or documented.
The NN Squad doubtless has some high purpose and a noble creed to drive them. But the truth is that I don't need them interfering with my contractual relationship with my ISP. I don't need them to monitor the Internet on my behalf, and I surely do not want them trying to represent me as a consumer before any government body or agency.
The Financial Times today reports that France is planning to take a hard line against downloaders of copyrighted materials - basically, a "three strikes and you're out" policy that will cut off Internet access for habitual offenders.
This news follows an op-ed by HDNet CEO and Dallas Mavericks owner Mark Cuban, who asks ISPs and networks to throttle back on Internet piracy because he doesn't want their illegal activities cutting into his bandwidth. I agree. In fact, had I had this blog up and running in time I would have beaten Cuban to the punch with my own support for Comcast and other networks that are managing traffic to keep all of us up and running.
For nearly two decades, I've defended file sharing for all of its legitimate purposes. I have testified before Congress that those who would destroy a technology just to stop a few lawbreakers are wrong. I have objected to characterizations of P2P as a tool of terrorism or a venue for child pornography. And I have helped to unmask and criticize the tactics of the RIAA and MPAA as unwarranted and counter-productive.
I still support P2P as a technology, and still believe the RIAA and MPAA are being hysterically wrong. But there is another side to this issue, and it needs to be said: the dominant use of P2P file sharing is not the noble pursuit of science or the battle cry of freedom. It is theft.
Early abusers of the P2P technology had a lot of ways to justify their theft - the arrogance and financial chicanery of the music industry; the fact that everyone else was doing it; the lack of legitimate online sources from which to buy music and video; and copyright laws that seemed to protect not the artists themselves but the selfish financial interests of their heirs and corporations.
Still, it was and is stealing. And it is made all the worse because today they are stealing from you and me. It's not just a quick con to swindle some large corporation - it's more like Robin Hood deciding to steal from the poor. These crooks are literally stealing the bandwidth I have paid for and that my family needs for our own uses. Shame on them for doing so, and shame on those who wrap themselves in the banner of freedom to justify it.
Who said that network operators like AT&T and Verizon are allowed to block any content they don't like whenever they want without a penalty? Well, Congress did, actually.
When AT&T acted to bleep out language it felt to be inappropriate in a concert carried over its network, it was not violating any law. In fact, the company was exercising its right to do so under the Telecommunications Act of 1996, which reads in part:
Section 509:
2. CIVIL LIABILITY- No provider or user of an interactive computer service shall be held liable on account of--
A. any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or
B. any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in paragraph (1).
The same law applied to Verizon's decision not to carry pro-abortion advertising on its network.
In both of these cases, however, the marketplace acted exactly as it should have to protect the interests of consumers. It corrected the situation without the need for more draconian legislation -- consumers complained; the companies reviewed their policies and made corrections. Situation handled.
But these two isolated incidents should send three clear messages to the Congress. The first is that they should read the laws they have already passed before creating new laws to contradict them. The second is that chasing the will-o-the-wisp that is network neutrality is bound to consume a lot of time and energy for little result, since the marketplace has shown it is capable of resolving the problems without new laws. And the third is that consumers are doing just fine in this regard without the help of Congress.
It's not popular in Washington these days to admit that the consumers can take care of their own needs in the marketplace. After all, if this is true we really wouldn't need Nanny Government to take care of us. Or the legion of self-appointed "consumer advocate" lobbyists who claim to represent us.
But just because it isn't popular doesn't mean it is not true.
A study just published in the Australasian Journal of Clinical Environmental Medicine links the rise in Wi-Fi use to the global rise in autism among children.
But before you flee in terror, let's note that the Wall Street Journal carried a piece last September from a leading researcher that says that most reported research today is flat wrong. Add to that the fact that most science and medical journals around the globe lack the peer review and documentation requirements that are considered necessary by US journals, and the claim of a Wi-Fi/autism link seems less credible.
Finally, it may be important to remember that the study's author, one Dr. George Carlo, has also spent the last decade claiming that autism is caused by cell phone usage - a claim supported by no other credible research. We don't know what causes autism or why the incidence of autism is growing, but ascribing it to the growth of Wi-Fi just because both occur in the same time period smacks of witch doctoring at its worst.
Why this sudden rash of anti-technology stories in the media? Well, they are hardly sudden. The same kind of claims have been made about the telegraph, radio, television (remember how the radiation from color TV tubes was linked to brain cancer back in the '60s?) and computers. Usually, these stories are just an over-reaction to the disruption and change that technologies bring. It would be sad, however, if the Wi-Fi industry would have to endure the decade of junk science and bad claims that have dogged the cell phone industry for the past two decades.
Are open networks and unlocked phones the Valhalla of cellular technology? Perhaps, but I have a strong hunch I don't want to pay for it.
Right now, I can get a phone that works right out of the box at a reasonable cost and with a choice of service plans. If it doesn't work right out of the box, I can swap it at a local store. If it breaks, I can get it fixed or get a replacement. If I don't understand it, I can call free tech support and resolve the issue.
It is the ultimate in reliability, but comes at a cost. I can't use just any old phone. I can't just have any old service plan. And I generally have to contract for an amount of time to use the service, so that the cellular company can plan its future cash flows and ensure that they have the operating capital they need to continue to innovate, deploy and serve.
It isn't the ultimate in freedom for me, but it isn't unreasonable, either.
Sure, I hate my cell phone. And I'm not happy about dropped calls, areas without service or the lack of data networks in rural areas. But that doesn't mean I think we should break a system that works in order to implement one that we're not sure about.
Consider this: if we open the cellular networks, who will be responsible for giving tech support on the flood of cell phones from all over the world. The cellular phone company? Not likely, or not at any cost I can afford. The manufacturer? Good luck getting that. The reality is that if we open the networks we will have to pay the price of that openness. And accept that this openness will be harmful to the vast majority of American consumers who need reliability as much as they need choice.
The folks at the Pew Internet and American Life Project produce some of America's most sane and useful research about the Internet. So two of their latest documents are worth attention:
In "Why We Don't Know Enough About Broadband in the U.S.," author John B. Horrigan notes that "Networks may be global, but measurement must be local." It offers a strong call for more data, better data and more granular data - that is, information at the smallest possible level. There's are bills in both the House and Senate to achieve this, and they need only a nudge (and a joint conference to resolve difference) to make them law. Sooner is better, in this case.
Pew also released the record of a conference they held on the issue of measuring broadband, with a wealth of ideas on how governments at every level can assist and speed the process. In the wake of such notable successes as the KentuckyConnect project, every state should pay close attention to this record and its suggestions.
Two other factoids of note in these documents: First, that half of all Americans now have a broadband connection at home. Second, that broadband adoption has occurred more rapidly in American than any other major technology in our history. Both of these should give pause to legislators and regulators who are wringing their hands over the OECD rankings or scurrying to impose new regulations on the Internet.
The Hill, a DC political newspaper, has an interesting editorial on the Network Neutrality issue that takes Rep. Edward Markey to task for a seeming flip-flop on the issue. It's a good read that drives home yet again why the ever-morphing issue of "neutrality" is a bad idea.
The issue seems to hinge both on how you define "neutrality" and who you think it should apply to. And that's a huge problem. For example, if we define it as treating all content equally, shouldn't we force search engines to stop taking money to place some search results ahead of others? It's been said that if we allow networks to create faster traffic paths for priority content, that everyone else will be stuck on the equivalent of an Internet dirt road. Logically, though, that means that if we do not build such fast tracks all content will be stuck on a metaphysical dirt road.
Current advocates of "network neutrality" aren't helping matters. With each passing day, they act less like responsible guardians of fairness and more like a drunken lynch mob - careening from technology to technology (cell phones, cable companies, phone companies, ad nauseam) in search of someone to string up. And like a drunken mob, the only cure is to send them home to sleep it off so that we can we can get on with a real debate of the issues in an open and orderly manner.
As for Rep. Markey, and other legislators anxious to move to impose new regulations on the broadband industry, the counsel of the Roman Galen seems appropriate: "Primum non nocere" (First, do no harm).
Hardly a day goes by without one organization or another declaring that the goal of American national policy in broadband should be competition. Competition, in their mindset, is the panacea for all Internet ills and all broadband issues. It is the sacred mantra of Internet openness, regulation and neutrality.
The problem with all of this is that competition is a strategy, not a goal. That is, competition is not the end point we want to reach, but rather one of the ways we will get there. But only one of the ways, because as any economist or marketer will tell you, competition is a very limited strategy that is useless in solving a wide range of problems.
Competition will not spur deployment of broadband. It will not heal the digital divides. It will not enhance innovation. It will not bring faster throughput, or better service. Money does these things - money to invest in infrastructure; money for education; money for research and development; and money for services.
We don't need more more competition if we are to bring broadband to the 50 percent of American consumers who don't have it at home already. These American families have a need for better computing skills, or live in areas with too small a population density to support a single broadband provider, much less multiple providers. We need more money. And to get that money, we must either plunder the public coffers or prove the business case for deployment to investors. And allow sufficient returns on that investment to make the ventures worthwhile for future funding.
Competition brings choice, and can help to lower costs. But as the most recent data shows, the US doesn't have a problem with low cost for broadband - at least until state and local governments find a way to slap taxes on it.
Competition is healthy and useful, but it is not a universal panacea for what we lack in broadband. Nor should it ever be our goal for a national broadband policy.
President Bush has signed into law HR 3678, the "Internet Tax Freedom Act Amendments Act of 2007," which extends the moratorium on State and local government Internet access taxes and multiple and discriminatory taxes on electronic commerce for seven years, through November 1, 2014.
Both sides are claiming victory - local tax authorities for fending off a permanent ban on the taxes, Internet companies for winning a major extension of seven years. In reality, both sides have lost since we will once again have to spend millions of dollars seven years from now to battle this all over again.
On the surface, this should be an easy call. After all, multiple and discriminatory taxes on the same service should not be allowed. And we shouldn't put a tax on Internet access while at the same time claiming we want to make Internet use more affordable for working families. To top it all off, the Internet is clearly a global medium that local governments have no right to regulate or tax under the Commerce Clause of the US Constitution.
Local governments and their allies in Congress don't see it that way. They believe that they are entitled to take revenue from where ever they may find it, and that the federal government shouldn't have the right to interfere. For them, Internet service is no different from telephone service in the last century, which they taxed at rates of up to 30 percent or more.
I tend to side with the Constitutionalists - not only because the Constitution is brutally clear on this point and shouldn't be meddled with, but because of the inherent purpose of taxes. In the notes of the Supreme Court judges who decided this question in 1992 for mail-order businesses (Quill vs. North Dakota), one of the judges stated with much clarity that taxes are not just tribute that governments may demand at their whimsy. Taxes are a payment for services rendered. For businesses and individuals within a given locale, the government provides services such as police and fire protection, zoning and other laws. Taxes pay for that.
But I am hard pressed to see what service the state provides when individuals receive signals by wireless or satellite. Or when they receive Internet connectivity over wires on which taxes and fees are already paid for other services, such as telephony or cable tv. No service, no taxes. Ought to be that simple.
Four years, hundreds of business plans, millions of dollars and thousands of pages of rhetoric later, it's clear that the idea of using Wi-Fi to blanket hundreds of square miles for broadband may not be the best idea mankind has ever had. But before we move on to better technologies and business plans, it may be helpful to clear the air on some of the lingering issues and bad feelings.
Here's my list of 5 things that need to be noted:
Wi-Fi is an excellent technology for the last 30 feet, but a lousy one for the last mile. It doesn't penetrate concrete, trees, distances beyond 30 feet or much of anything else well. Need proof? Just call tech support for any Wi-Fi router manufacturer and ask them what the reliable range of their product is.
The business plans for municipal Wi-Fi projects were nearly all garbage. They were filled with unrealistic expectations, irrational promises, hopes, dreams and exuberance. What they lacked were realistic budgets, market assessments, evidence of existing consumer demand and a sound business justification for building the network in the first place.
The news media was a major factor in the failure to recognize that municipal Wi-Fi is a bad idea. The many city newspapers, bloggers and trade magazines who breathlessly extolled the virtues of municipal Wi-Fi with an amazing lack of business experience, technical acumen or even common sense helped to fuel the bubble and mislead otherwise well-intentioned city leaders. Shame on them.
The telephone and cable companies are the heroes in all this, not the villains. While much fun was had bashing these companies and assigning t them all manner of nefarious motives, they were just about the only ones who had the experience to see that these networks wouldn't work as advertised. And the only ones who understood that using tax dollars to fund "white elephant" networks was a bad deal for consumers. Sadly, most of the self-styled consumer advocates did a lousy job of standing up for consumers in this matter.
When all was said and done, we are still left with what clear thinkers (including myself) had to say from the outset: that Wi-Fi has significant technical, security and business issues that would prevent it from being a suitable medium for widespread broadband deployment. By the way, the clear thinkers were the ones viciously attacked as being "sock puppets." They deserved better then, and do now.
I live in the rural farmlands at the edge of the Blue Ridge Mountains, where broadband is hard to come by. I wish with all my heart and soul that there was a free, high-speed service that could solve my broadband woes. But wishing won't make it so, any more than it did for Philadelphia, San Francisco or anywhere else.
