May 2008 Archives
The OECD has again released a ranking of broadband penetration worldwide, and once again the United States is ranked 15th in the world, somewhere slighly below the Grandy Duchy of Luxembourg.
You can already hear the gears grinding. Disreputable blog sites are gearing up to use this factoid to again attack America's broadband industry. Pundits are pontificating, politicians are blustering, and the lunatics on the left are again DEMANDING that the government seize control of broadband -- or at least tie it up in 19th Century-style regulations. Woe is U.S., again.
But before this nonsense goes to far, will someone please actually read what the report says, instead of simply swallowing the OECD press release? Because even the most cursory glance at the data would make any rational person ask, "Are they just making this stuff up?" And the answer, sadly, is "Yes."
Here's what's interesting about the OECD data:
- It measures broadband adoption, not deployment. The data presented isn't about where broadband reaches, but rather how many people are subscribing to the services. Even then...
- The U.S. data is not from December of 2007, as advertised, but from 2003. Strangely, when it comes to the data for household subscriptions to broadband, the figure is frozen at the 2003 levels of fewer than 20 million. But it gets even worse...
- It's not even data. The U.S. figures were, according to the authors, an "OECD estimation based on company reporting." You have to wonder what company data they used, since current US estimates are that some 60 percent of the 105 million US households now have broadband. But then...
- They fudge the figures. The OECD numbers allow Korea to include people whose broadband access is via cell phone, but the US numbers don't include that. Nor do they include the nearly 12 percent of the U.S. online population -- that would be another 7-million plus Americans -- who use Wi-Fi connections. Include some things, don't include others, and voila! The next thing you know, lower Botswana will have better broadband penetration than the U.S.
The rest of the so-called data is equally bad. When they compare prices from country to country, they allow some countries to use figures that include long-term discounts that don't generally apply in the U.S. And they fail to note where countries heavily subsidize the cost of broadband to artificially make their numbers look better.
The OECD itself -- feeling bee-stung by the tidal wave of criticism for its bogus "reports," has coyly noted in the report that the information should not be used to make conclusions about public policy, and that the report may contain some inaccuracies. But you won't find any such statements in press release touting the report, or in the "conclusions" it presents that urge governments to push for "competition" and "open access." Those latter recommendations, it may be noted, are based entirely on the political prejudices of whoever wrote the news release -- the recommendations are neither mentioned nor supported in the data.
The OECD study is junk science, but it does provide an opportunity to remind those of us working in broadband public policy of three key rules:
- Some people just plain hate America, and will use any bogus data or flimsy excuse to humiliate this country on the world stage -- or worse, encourage us to adopt really, really bad policies -- in order to gain some advantage over us on the world stage. I would hate to think this applies to the OECD, but one has to wonder why, year after year, they continue to flaunt phony studies with bad conclusions that make the U.S. appear to be something other than a world leader in broadband.
- News releases announcing studies almost never match the data. The Wall Street Journal concluded this in an article last fall, noting that in nearly 90 percent of cases they studied the data did not support the conclusions reached in the news releases.
- It's about adoption, not deployment. The United States clearly has some work to do to bring the rest of our population online. But we won't achieve that by focusing on broadband deployment, or by continuing to attack broadband infrastructure companies. We can only do that by addressing the reasons why some people aren't using the Internet -- primarily lack of education, lack of computing skills and a lifestyle in which Internet access is not relevant.
The knee-jerk pundits and politicians who can't be bothered to actually read the studies, or who base their positions on press releases and bluster, will eventually look as silly as they truly are. We can only hope that happens before they adopt needless, destructive and badly-written legislation that may actually make our national broadband as bad as the OECD studies try to make us appear.
Hoo, boy, do the folks at Public Knowledge have thin skins.
All it took was a blog post on the American Spectator site, referring to "Public Know Nothings," to set off a virulent attack on anyone who doesn't buy into the myth of "network neutrality."
"Most congressional Republicans oppose the idea of giving consumers freedom on the Internet," claims PK's Art Brodsky. Democrats who oppose neutrality legislation are treated even worse -- "They are simply servants of corporate and/or union interests."
Brodsky goes on to trot out all the usual nonsense about how the Internet, though comprised of tens of thousands of individual, privately owned and operated networks, is somehow really the property of the US government, and a public utility to boot, and therefore all kinds of laws (like censorship laws) that don't apply to private companies somehow should apply, because...
Well, because what?
All this sloppy tripe, wrapping "network neturality" in the sheep's clothing of "Internet freedom" can't hide four basic problems with the whole "neutrality" campaign:
1) No one knows what the hell you are talking about, including you. The definition of "network neutrality" changes almost daily, according to whatever whimsical issue the neutrality advocates are angry about. Sometimes it is tiered pricing, sometimes it is about faster delivery of high-bandwidth applications, sometimes it is about their right to chant obscenities over the Internet, and sometimes it is just about resurrecting the failed telecom policies of the Nineties. Whatever. Just go away until you can actually explain what you are angry about, in ten words or less. Without quoting Karl Marx.
2) Consumers aren't buying it. If this is such a burning, critical, house-a-fire issue that demands immediate regulation and legislation, where's your support? Sure, the folks at MoveOn.Org got its army of zombies to paper Congress over the issue back when it was trying to win the 2006 election for the Democrats. But let's do the math here. There are now some 100 million Internet subscribers in the United States, including 70 million households. There were 150,000 people who sent emails to Congress in support of Network Neutrality. That's 0.15 percent of the online consumers. Not 1%. Fifteen hundredths of one percent. By conparison, 24 percent of Americans believe in alien abductions, and 7% believe Elvis is still alive.
3) This isn't a "one-size-fits-all" Internet. As it stands today, consumer rights on broadband networks are guided by a set of Principles adopted by the Federal Communications Commission in 2005. These Principles were intentionally not made regulations, in order to afford the Commission the ability to assess each situation as it comes up. They recognized that you can't simply slap heavy-handed regulation on an emerging technology, or the evolution of that technology would almost immediately render the regulations useless. Sadly, this system does not give lobbyists, advocates and self-styled "public interest groups" the opportunity to self-aggrandize and score political points. It doesn't permit blatant "gaming" of the system. And it requires that those who file complaints actually have facts to present. Network Neutrality advocates are hoping to overturn this sensible system, and you have to wonder why.
4) It's tired. It's been dragging on since the fall of 2005. The US Department of Justice, the Federal Trade Commission, the Federal Communications Commission and the US Congress have repeatedly and consistently said there is no basis for Network Neutrality legislation, yet the issue stumbles on like a weary, mindless zombie headed no-one-knows-where. Its 15 minutes of fame are over. Taps has been sounded. It's time to Move On.
Two and a half years. Millions of consumer tax dollars spent. Public hearings on both coasts. Tens of thousands of pages of files. And to what end? There still is no evidence that freedom on the Internet is in jeopardy, unless you count the "freedom" to steal your neighbor's share of the local loop. Nothing has happened that the system can't handle efficiently, as we have already demonstrated.
That doesn't mean that we don't have some work to do. The US broadband infrastructure is great today, but will need ever more work to expand and improve it in the future. We have to address the illiteracy rates and lack of computing skills among some members of our population, so that they can more easily participate in the benefits of the Internet. And we need to continue to encourage innovation and investment.
"Network Neutrality" does none of these things, and it is time we stopped wasting time on it.
As the end of his term as Chairman of the FCC looms, I am becoming more comfortable with Kevin Martin and his style. In fact, I'm downright tickled with his recent handling of the "network management" flap and its demonstration of how well the system works.
The furor over using forged TCP reset packages to shape traffic on Comcast's network clearly presented a legitimate question: To what degree are such actions in the best interests of consumers, and to what degree do they violate the spirit and letter of the Principles adopted by the FCC in 2005?
The way the process is supposed to work is that such questions are first handled directly between the consumer and the broadband provider, based on terms of service and commercial agreements. When this first step does not resolve the issue, it gets elevated to the FCC. Which it did.
Here's where things get sticky, because this legitimate issue of consumer rights got tangled in the efforts of a lunatic minority to force the FCC to adopt new and outrageous regulations for the Internet. This minority of roughly one one-thousandth of one percent of Internet users in the US sought to use this legitimate inquiry to bully the FCC into changing its principles into hard regulation. This would then enable a handful of lobbyists to "game the system" whenever they want by endlessly accusing broadband companies of "violations."
The FCC knew there was a potential for the Principles to be abused. That's why they clearly stated at the time of their adoption that the Principles did not and would not be regulatory rules. This way, the Commission has the flexibility to address each situation as it occurs. It was a wise move in 2005, and remains so today.
So the issue is taken to the FCC for consideration, and things get tricky because the pro-regulation minority was howling for a one-size-fits-all regulatory quick fix they could more easily use for their own political purposes. Kevin Martin had to weave his way through this minefield.
But then things spun out of control at Comcast.
I've worked for enough large corporations, both inside and as an advisor, to know that things can pile up during a crisis. Good intentions turn bad, innocent actions are in retrospect portrayed as sinister, and the whole organization is left wondering what the heck happened. If you want proof, just consider the Exxon Valdez oil spill.
Whatever the reason, it appears that Comcast first tried to duck the issue, then prevaricate its way out of the issue, and then compound its public relations problems by derailing the FCC's hearing in Boston, filling the public seats with homeless people.
Which, of course, was the cue for Congress to open its own witch hunt over the issue.
In short order, Chairman Martin faced the task of protecting the integrity of the consumer protection process from both the raging minority of pro-regulation loons and the Congress; while dealing with the questions of policy that were presented in the first place; while keeping intact the consumer Principles enacted by the FCC; and providing support for the legitimate needs of broadband providers to manage their networks. Oh, and punish the guilty if there were any.
It wasn't easy. It took guts, a steel-reinforced loin cloth, a commitment to principle and a belief in the power of the process to listen to the loons without over-reacting, stare down Congress and push to a resolution. But in the aftermath, here's the scorecard:
* Everyone got their day in court in a hearing before the FCC.
* The Commission clearly upheld the need for and benefits of network management, refusing to buy into the vision of a "wild west" internet ruled by anarchy.
* Chairman Martin held his own before Congress, outlining the policies clearly.
The process is not complete, of course. Martin has indicated he will take action against Comcast for its behavior, though he has not specified what action. And there remains the question of how this might impact other service providers and their efforts at traffic shaping.
There are other benefits as well. Consumers learned more about how a handful of users are taking more than their fair share of bandwidth. We all learned more about the progress being made to accommodate file sharing on broadband networks, through such efforts as traffic shaping and P4P. And the process drew attention to the need for more transparency in commercial contracts and user agreements, so that both sides more clearly understand the terms of service.
Best of all, the process was validated. It works, and we don't need draconian regulation of the Internet to assure that problems can be handled effectively.
Kevin Martin, the lame-duck Chairman of the FCC, refused to be bullied by either the loons or the Congress, His performance through it all was calm, deliberate and purposeful. And that's not bad at all.
I'm perplexed about Universal Service.
On one hand, it has achieved wonders in ensuring that Americans everywhere have reasonable access to necessary telecommunications service, and has helped to make our telecom the envy of the world.
On the other hand, it is a bloated, fraud-ridden, poorly designed, hidden tax on consumers that is desperately in need of reform and rethinking. Whether we expand it, kill it, roll it up or roll it down, something clearly needs to be done.
I'm equally perplexed, therefore, about what to think of the FCC's decision to cap funding for rural cell phone support while it and the Congress mull a more permanent reform strategy.
Capping the runaway expenditures is clearly a relief for consumers -- particularly those who don't benefit from rural cell phone deployment but must nonethless foot the bill for it. It likewise benefits telecomm companies who are busy deploying in less rural areas and shouldn't have to sacrifice their time and money to serve markets they don't serve.
But then there is the question of broadband.
Cellular service in rural areas is often accompanied by deployment of 3G broadband services, and this is creating a quiet revolution in rural broadband. Where you still cannot get a cable modem connection or DSL, you can often get an HSDPA or EVDO signal. And while this is still first-generation stuff, advances like EVDO Rev. A are making it better every day.
Cellular broadband is reaching the unreachable. It is delivering higher speeds, greater competition and more reliable Internet service to rural areas in ways that can truly deliver on the promise of broadband in the very near future. But getting there will take a lot of investment -- much of which can't easily be justified to private investors or corporate shareholders. And that is exactly the kind of situation Universal Service was intended to address in the first place.
On reflection, I don't have a problem with capping cell phone expenditures in the short term, if for no other reason than to help keep costs from running even further away. But in doing so, I'd like to see more acknowledgment of the value of cellular broadband for rural America, and some commitment to ensure that it gets its fair share of attention as well as scrutiny.
