Broadband & States Rights with Thom Stark   1 comment

Thom Stark and I are continuing our conversation. One of the goals of this dialogue, similar to what I am doing with Becky Akers (Conversation with an Anarchist) is to show that reasonable people can disagree in a sincere and robust manner without acting like Neanderthals. Thom is what I would term a progressive and I am a conservative-libertarian-edging-toward-voluntaryist. We aren’t going to agree on many issues, although we have found areas where we agree more than we disagree. And that, my readers, is what American liberalism is all about. Lela

Thom StarkLet’s start with your assertions regarding Chattanooga’s fiber optic MAN, shall we?

First off, the PPIC study you cite speaks in only very general terms about the economic benefits of very-high-speed Internet access. Widely-available advances in technology create social change (automobiles, anyone?), but that change does not usually happen overnight. Sure, broadband availability does not seem to have resulted in a significant increase in work-from-home employment. However, that is most likely because management practices are inherently conservative – and managers insist on being able to physically keep an eye on their employees. (Heck, I was working from home one day a week back in the very early 1990’s, when I was employed by Wells Fargo Bank, back when dialup via 56K modems was pretty much the standard Internet access paradigm – but that was because my supervisor realized early on that no one has to crack a whip over me.) The so-called “virtual corporation” is still mostly a theoretical construct. Give it time.

The fact that the main uses private citizens have for the Internet are entertainment-oriented is not a valid reason to scorn gigabit access. Entertainment is a gigantic part of the American economy. Consumers throw billions and billions of dollars at it every year – and, the music business aside, the entertainment slice of our economic pie gets bigger in both absolute and relative terms every year. We are now at the front end of a general revolution in the way that audio-visual entertainment is delivered. That is a Good Thing. People are sick of cable companies’ anti-consumer “tiers” of service that require them to subsidize programming in which they have no interest in order to receive two or three channels they actually want to watch – and that business paradigm is on its last legs now. In ten years, that will have withered away – and it’s actual broadband access that will enable it.

Which takes us to the definition of broadband.

You cited an FCC study that determined that 85% of the American public already has access to broadband Internet connectivity. The thing is, that was under the old definition of broadband – a definition that the rest of the developed world quite rightly considered ridiculously inadequate – which was the one the cable companies and telcos the Bush administration’s version of the FCC to write into law. In the telcos’ world, 4 megabits down and 1 up equals “broadband”. Meanwhile, in Finland, where Internet access is legally considered a human right, the standard requires 100 megabit connections to qualify as broadband (and that level of service is available for the equivalent of $40/month). On January 29, the FCC raised the minimum service standard to qualify as broadband access to 25 megabits down, a move that was long, LONG overdue, and that reduces the number of Americans who have broadband connections to 72%. I would argue that even that definition remains wholly inadequate – but at least it’s less of a sad joke than the old one.

The thing that made Steve Jobs the visionary that he was is that he understood that people often don’t have any idea they need something until someone shows them what they’ve been missing. Digital music players were around before the iPod, but it took Jobs’s marketing campaign to make them ubiquitous. Virtually nobody cared about smart phones until the iPhone was released. Now everyone has one. Ditto tablet computers and the iPad. The same thing is true of broadband. Until you personally experience what it’s like to have websites load as if they’re on your own hard drive, until you experience high-definition streaming video, while downloading a DVD’s worth of patches and enhanced content for your kid’s favorite videogame – and you do both things while he’s logged into the Xbox network – you have no idea what you’re missing. Once you do experience it, you wonder how you ever got along without it. Experiencing is believing. So the argument that broadband access hasn’t created any major, direct economic benefit to consumers fails on two fronts: first, that the definition of broadband the PPIC study employed really wasn’t broadband at all, but rather the fiction of broadband foisted on the public by the telcos and cable operators, and second, that enough time has not elapsed since even most Americans had even that laughable definition of broadband access to see direct economic benefits accrue from it. Meanwhile, the indirect economic benefits are non-trivial. The rise of original programming for streaming video services has created quite a few jobs, for instance, and there are many more on the way, as the cable MSOs discover that the whole basis of their industry is eroding away, as more consumers realize that they really don’t have to simply accept the tiered-access paradigm any more.

So, now, to Chattanooga.

Back when dinosaurs ruled the Earth, and the Apple II was the be-all and end-all of microcomputing, I labored in the vineyards of cable TV programming. I’ve seen the industry from the inside. It stinks. The business model is based on franchise agreements with municipalities that give MSOs exclusivity within the franchise service area. That means no other entity is ALLOWED to provide cable service within the franchise area. Thus, once the agreement is signed, the cable company is handed a monopoly, typically one that runs 20 years, with an automatic renewal provision that prevents the city from inviting competitors into the franchise area unless the franchisee can be proven to have broken the terms of the franchise. Effectively, that means a perpetual monopoly – and cable operators don’t hesitate to sue to enforce those monopolies. (Incidentally, that’s because, back in the late 1960’s, rural and mountain communities had to get down on their knees and beg MSOs to build CATV systems for their TV-deprived citizenry. This was decades before the cable companies discovered that they could also deliver Internet service via the same cabling system that served their customers TV shows – nearly a decade and a half before DARPAnet became the Internet, in fact.)

Comcast and its ilk are, in fact, parasites, not Atlas Shrugged-style “makers”. They fight tooth and nail to avoid investing in system upgrades that would enable their customers to enjoy higher bandwidth, because “what have you done for me this quarter?” is the Gospel of the MBAs that run them. They don’t give a damn about their customers, other than as sources of essentially free money. (Once the system is in place, there’s no real expense – other than billing – to the MSO to continue to provide Internet access for its subscribers. The only reason they raise the monthly Internet subscriber fee every year is to funnel more money into the pockets of shareholders, so the CEO can brag to his board of directors. Programming costs for TV content continue to rise – but the cost of providing Internet access do not.)

Again, Comcast was asked to build a fiber-to-premises system for Chattanooga. It declined, citing the tired old arguments of lack of demand and the cost of upgrading the system. Tom Wheeler, the Chair of the FCC has rightly (and publicly) laughed at those arguments, because they are 100% the south-end product of a north-facing bull.

As for your contention that the surrounding municipalities’ electric ratepayers will be required to provide $2 million “support” for the system’s expansion into suburban Chatanooga, that’s more cable company propaganda. The expansion requires cabling. That cabling has to go somewhere. The two choices are underground – which is VERY expensive – or on poletops. Comcast is claiming that using the electric utility’s power poles will cost the ratepayers $2 million a year in additional costs, while, in fact, the cost to maintain the fiber plant will NOT be borne by electric ratepayers. Broadband subscribers will pay that cost. (The service life of a power pole is not significantly affected by adding a fiber optic line to the burden it carries, btw. Again, as Disreali probably did not say, there are three types of lie: lies, damned lies, and statistics. Comcast LOVES to use statistical arguments.)

There are, in fact, multiple private companies that are rolling out fiber access to municipalities around the country these days. Google is in the lead in this respect, and its ISP business is designed to break even, not turn a profit.

Heresy, right?

Not really. Google realizes that the key to every profit-making venture in which it engages is Internet use. Enabling gigabit access at reasonable prices is, for Google, essentially cultivating the field in which its profits will grow.

That’s because, unlike Comcast and its shabby sisters, Google’s executives understand the concept of enlightened self interest. They know that it’s in their best interest to give the razors away, because their customers will be buying razor blades from them for the rest of their lives.

BTW – Outside of Silicon Valley and the SOMA district of San Francisco, Seattle is probably the biggest tech hub in the country. OF COURSE it has lots of competition in its ISPs. Chillicothe, Ohio, by contrast, has effectively none. There’s the incumbent telco and its DSL offerings, and Time Warner. That’s basically it, unless you count the outrageously expensive, data-limited LTE connectivity offered by wireless service providers. I don’t.

Lela Markham Davidson Ditch CorrectedAs for Alaska’s Congressional delegation, I don’t think you really have much room to complain about unequal representation. Yes, Don Young is your only Representative, in a House of 435 such reps. The thing is though, you have two senators, just like every other state in the Union. The fact that they’re both sock puppets for the oil industry (and thus unresponsive to the needs of their constituents) is the fault of your electorate, not the bicameral national legislature. All U.S. legislation (other than treaty adoption) requires the votes of both Houses, so, in reality, Alaskans have just as much power in this respect as other states do. And, as frustrating as the Senate’s use of cloture to derail lawmaking that would otherwise pass by majority vote can be, I think the founding fathers were wise to divide our lege into upper and lower houses. The current edition of the House is full of yahoos, few of whom seem to have any faint idea of the notions of compromise and negotiation, but instead devote themselves to flinging verbal feces and pounding their chests. Nowadays, that chamber is so dysfunctional it can’t get out of its own way. So, one representative, a dozen, 23? Who cares? The current House of Representatives is pretty much entirely irrelevant, politically speaking. The action that matters is all in the Senate – and there, Alaskans stand equal with every other state.

 

One response to “Broadband & States Rights with Thom Stark

Subscribe to comments with RSS.

  1. Pingback: Lela Markham on Monopolies | aurorawatcherak

What's Your Opinion?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

thebibliophagist

a voracious reader. | a book blogger.

cupidcupid999

adventure, art, nature, travel, photography, wildlife - animals, and funny stuff

Republic-MainStreet

The Peaceful Revolution Liberate Main Street

atleastihaveafrigginglass

What could possibly go wrong?

Who the Hell Knows?

The name says it all.

Rebellious Hazelnuts

Surreal Stories, Very Tall Tales

Adjusting My Sails

When the wind doesn't blow the way you want, adjust your sails

Stine Writing

Poetry, Positivity, and Connecting!

Writer vs the World

In search of beauty, inspired by literature.

<span>%d</span> bloggers like this: