June 2008 Archives
Those who demand the regulation of broadband -- open access rules, network neutrality rules, a national broadband plan, rate regulations, expansion of universal service, ad nauseum -- are fond of claiming that what we must fear most is the emergence of a monopoly that controls all of broadband. One mega, evil networking company that seeks to control what we see, how we see it, who can be on it, and who can't.
They speak of monopolies, and duopolies, and whatever-big-word-we-can-think-of-to-scare-you-opolies, and point their long, sanctimonious fingers at leading network operators as likely villians.
Which is proof that those who will not learn from history are doomed to become progressive liberal telecom pundits.
Just for the record, free markets abhor monopolies. In a free market, unfettered by government interference, the marketplace will move quickly to quash possible monopolies through innovation, competition and consumer choice.
How, then, do monopolies get created? By governments, of course. Only with the direct intervention and deliberate cooperation of the government can monopolies form or continue. A case in point? Monopoly cable franchises.
But if we are talking about how broadband might become a monopoly, we have an even better example. Once upon a time there was a telephone company called AT&T (which, for the record, is not the same company in any way as the current one that carries the AT&T brand name). AT&T the telephone company did not set out to become the monopoly that had to be broken up in 1982. It followed a process, set by the United States government and agreed to by the officers of that company in what, in retrospect, turned out to be a deal with the devil.
It began with the patents, and with the confusion and meddling at the Patent Office that gave the lion's share of the telephony patents to a single, pre-selected winner. Then, around the time of World War I, the telephone system was declared so critical to the security and future of the US that it was nationalized. Not many years later, the government sought to ensure low rates, and so introduced rate regulation for telephony -- including cross-subsidizations, government supports and other artificial mechanisms. The final step was to make the telephone company an instrument of social policy by implementing universal service and minimum service mandates.
All of which must sound eerily familiar to those attempting to battle for consumer choice and free markets today. The Patent Office is an ungodly mess, giving power hither and yon based on shifting definitions and interpretations. In the wake of 9-11, we have the Internet declared to be essential to US security and the future. So-called consumer advocates are demanding telephony-style rate regulation. And Congress is trying to expand the mega-billion universal service program to broadband.
How much of this is supported by the networking companies? None. How much do they want to return to the old days of monopoly operations? Not a bit.
Which again begs the question: if it is not the networking companies pushing us down the long, slippery slope that could lead to a monopoly, who is it?
I'll take a wild guess that it is the same bunch of academics, policiticians and pundits who are pushing hard to put all the pieces of a monopoly in place -- the net neutrality/open access/rate regulation crowd. They are not a bit interested in letting consumers in a free marketplace keep us off of that path, and are pushing as hard as they can to create the government co-conspiracy that will enable them to choose which monopoly company will succeed.
Which is why I can't and won't ever support them.
Over on GigaOm, Worldwide Lexicon founder Brian McConnell has blogged about the reasons why municipal Wi-Fi has been an astounding disaster, and what can be done to fix it.
He's half right.
McConnell correctly notes that one of the biggest problems was that Wi-Fi advocates completely misunderstood who used public Wi-Fi. He notes that "muni W-Fi proponents have misunderstood how the Internet is used in public spaces, primarily by assuming that people who can afford laptops are somehow unable to afford Internet access."
That's one of the reasons. You can also add lack of planning, poor reception, technical obstacals, abysmal security and the "somebody else will pay for all this" mentality that seems to follow these projects, but I won't quibble.
McConnel then goes on, however, to state that the problem of serving the poor and minority could be handled by giving anyone who can't afford broadband a cell phone data plan and a data-enabled cell phone. McConnel elegantly puts it this way:
"It seems reasonable to me to require mobile operators -- as a condition for siting cell towers throughout a community -- to provide basic service to users who can't afford it."
Pardon me for saying this, but I think most municipal governments would chew off their arms rather than give up a sheckel of the loot they extort from the cell phone companies for the right to build towers. They are unlikely to give up the loot in particular to help poor people get cell phones. Still and all...
McConnell should get high marks for a good idea. He begins with the premise that public-private partnerships could be a good idea in the cell phone market, and that expanded use of data on cell phones would be helpful to some poor people. He even takes the tech community to task -- rightly, IMHO -- for its arrogance:
"Most of us who read this site take communication for granted, and frankly, have a warped view of what people outside the tech industry need. Talk to a tradesperson or someone who falls under the category of the "working poor" and you'll get a much different view of what's important (things like an affordable place to live, basic services, the means to find work and get things done)."
But McConnell's idea suffers from the same major flaw as arguments for municipal Wi-Fi. It's based on wishful thinking, not on data. McConnell must know that even poor families already have cell phones, and that plans exist to help them with "lifeline" services. Likewise, I don't think that the problem is that people can't get reasonably-priced plans for mobile communication, even if they involve pre-paid phones.
The problem remains literacy, and computer literacy. All the infrastructure in the world won't help if Johnny can't read. And that's the crushing problem that is holding back the national adoption of broadband, more than any other single factor. Not deployment. Not cost. Not competition.
Literacy.
McConnell is on the right track -- public private partnerships, helping poor people become economically independent, and helping them to upgrade to better plans as they can afford them. He should be encouraged to take the next steps to flesh out his ideas with more and better data.
And if they are thinking clearly, the mobile communication companies will help fund that effort.
