Another “victory” for US broadband: cable will win

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Another “victory” for US broadband: cable will win

February 26, 2007 at 3:24 PM by Esme Vos

So is this why the US government has been holding back competition in the US? So that Verizon and AT&T can provide fiber to a shockingly tiny percentage of the US population?
Recall that many of the anti-municipal broadband bills that the telcos tried to get state governments to pass were based on the following argument: If we (the telcos) spend millions of dollars rolling out broadband to your communities, it would be unfair competition for you to spend taxpayer money rolling out broadband networks in competition to ours. Do you want our fiber or not?”

And there has not been any comprehensive, sensible broadband policy at the FCC level or in Congress. Every time local governments try to create or enable alternative broadband networks or even deploy their own fiber (like Project Utopia in Utah or Lafayette, Louisiana’s FTTH project), the telcos complain about unfair competition and bring lawsuits.

A report from Sanford C. Bernstein & Co. says that although the telcos are starting to deploy FTTN and FTTH, the reach will be sharply limited:

“The report notes that FTTH networks will reach less than 14 percent of U.S. homes by the end of this decade. Verizon’s FiOS plant will be offered to just 13 percent of the U.S., Bernstein said, citing Verizon’s projections. FTTN networks, akin to AT&T’s strategy in brownfield areas, will reach 26 percent of the country by 2010, the report forecasted. That means the balance of the telco footprint - about 60 percent - will continue to be served by DSL technologies. And that, in Bernstein’s estimation, is not exactly a good thing, particularly as Internet-video services continue to proliferate.”

The Sanford Bernstein report concludes that the cable industry is poised to “win” in most of the US. Jim Baller says, “Calling this disgraceful situation a “win” is an insult to all Americans.”

Tags: broadband, duopoly, regulation

2 Comments on “Another “victory” for US broadband: cable will win”

John Cooper Says:

February 27th, 2007 at 8:10 am

I just read this post and Gary Bolles similar post describing the discussion on broadband policy at the Tech Policy Summit (Broadband Policy: Too Much or Too Little?) - so this comment applies to both.

While I side with Jim Baller on our need for an EXPLICIT, broad-based, comprehensive national broadband policy based on a national discussion of all interested parties on this vital strategic issue, I can’t help but juxtapose that idea with what I see in these two posts that is revealing of the incumbent vision, and ask the reader - which POV most closely aligns with our ideals of an open, pluralistic, democratic society?

Esme describes what can only be seen as an IMPLICIT policy of giving telecom and cable incumbents free rein and continuing an advantaged position for them - in effect, the result is a pro-corporation, anti-consumer policy. Through its inaction to promote a national discussion and seek a more balanced middle way, the government frees the large players to execute their business plans on their own timeframes. And every year of inaction to create an inclusive strategy based on a balanced discussion equals a delay in broadband options for consumers and billions more in revenue for the incumbents. This is Laissez-Faire economics on steroids. I would argue that it is not inattention by government leaders either, but a defacto government policy on broadband, just not one that most consumers should favor.

The result is predictable (if depressing): 1) a redlined telecom fiber broadband network that serves the densest, most profitable territories; 2) urban cable broadband access available wherever their cable infrastructure happens to be (dense neighborhoods, but still wider distribution than newly laid telco fiber); 3) mobile internet access from cell carriers through expensive data plans, featuring Walled Gardens of content made available to cellphones tied to one specific cell plan provider’s two-year lock-in service plan, with bandwidth sufficient for email and surfing the web - a plan almost exclusively tailored for limited use by the business traveler; and 4) slow, but growing adoption by municipalities of newer technologies like Wi Fi Mesh and WiMAX, in essence a work-around for this lack of an integrated national broadband policy, but one which is constrained by lack of access to unlicensed non-line of sight spectrum, which would lower costs and increase the value of these networks.

When there is no broad-based explicit policy, as Jim promotes, there is nevertheless an implicit policy in that vacuum. We should call this one as it is, an elitist unwritten policy of corporate protectionism. Seen in this light, it’s no wonder that we hear arguments in Gary’s post from the ATT executive against the need for unfettered end user equipment, and from the Verizon executive against the need for a government policy on broadband.

From their perspective, after all, things are going well and according to plan. Incumbents and beneficiaries of the status quo NEVER favor change that opens up markets, lowers costs, or provides customers with more freedom and power. That would be irrational and anathema to the interests of their shareholders; I understand it, but I don’t like it.

Taking care of ALL the people, not just shareholders, is the government’s job. It’s most efficient on issues like broadband policy when national government leaders accept the mantle of leadership and take action based on principles - sometimes they have to take action to rein in corporate behavior that does not suit the broader national interest, even if it hurts them politically. But we haven’t seen that in a long while.

At least a growing number of local governments (and a few state governments) still understand their role in a democratic society - to support the welfare of all citizens. Until we see a change in attitude from our national government institutions, I’m afraid we’re unlikely to see a more balanced and open national broadband policy. The status quo serves the interests and aligns with the world view of our current political and corporate leadership.

Frank Carreiro Says:

November 6th, 2007 at 11:50 am

Don’t forget that without an infrastructure in place, we’ll have to depend on companies such as Comcast for service.

Basically that means you “could” lose your service up to a year if you use it too much or have it dog slow if you are using any of dozens legal bittorrent services because Comcast doesn’t like the protocol.

If we don’t have Net Neutrality or an infrastructure like public roads, then how can we expect to compete in the world when they are light years ahead of us?

MuniWireless

Another “victory” for US broadband: cable will win

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