The COOK Report on Internet
January - February 2006 (14.10 -14.11)
Morphing of Capitalism from Closed and Mercantilist in the US to Open and Collaborative Abroad
Thoughts on What these Changes Mean for Telecommunications and Innovation in the US and in the Global Economy
How to purchase this issue. $325 or $1100 group. The January - February 2006 issue looks at telco attempts to monitize eveything thier customers do and examines local attempts to build infrastructure: Villages Branches in Quebec and Champaign Urbana Community Wireless Network. Our Symposium members continue to dissect IMS and comment on the telco's innability to innovate. They pick appart the self-serving nature of the LEC's network neutrality bandwagon. Regulatory issues of common carriage, FCC Voip 911 shenanigans, the sale of Skype to eBay, and Google's dark fiber plans are scrutinized. We include an interview with JP Rangaswami of DRKW.
January 17, 2006 Ewing, NJ -- Capitalism in the United States in the 21st century has not moved forward with the rest of the world. We are still embedded in the post World War II mindset of America as the great economic power at the peak of the industrial age. While many of our giant corporations are shrinking in size, in 2005 in American telecom there were two major exceptions to a trend in the technology area of downsizing driven by increasing commoditization as companies try to become more nimble in order to compete in a globalized economy.
How ironic that the US created the Internet, forced it on the rest of the world along with telcom liberalization and then used the first five years of the new century to march backwards undoing within its borders the new Internet and delivering to the telcos and cable companies the ability to create a "faux" Internet that not only has no open access but preserves their way of charging for everything --“Internet.” This pseudo “Internet” is one that is to be operated in such a way that the local citizens will be stuck with an architecture and terms of service that will prevent them from running the kind of infrastructure found in the home-based business or the SME shops that predominate in East Asia and are revolutionizing the economy of that part of the world. The Bell's insistence that their interests come first are forcing American small business to compete globally with its hands tied behind its back.
The Ownership Society is Closed Capitalism and Mercantilism
The bottom line is stark and simple. The “ownership society” in the US is about closed capitalism where in the outmoded 20th century manner, infrastructure vital to this nation’s future is divided up and then resold to the highest bidder. It is about a patent system run amuck and a copyright system gone wild. It is about the 20th century ideas of content creation where the studios turn out a handful of good films in the face of dozens that are variations on 30 years old themes of mindless violence and the studios wonder why attendance is declining!
Public Infrastructure Betrayed
Meanwhile in the US, the term national or public interest has been effectively destroyed by the “conservative” ascendancy of the last 35 years. Americans have become largely convinced that government, by definition of simply being government, is incompetent. The unfortunate outcome of this is that, especially under the current Bush administration, private interests rule, and as the current scandals are beginning to show, all too often capture public funds which are then used for personal benefit. Because there no longer is any viable “public good,” giant, antiquated, backward looking private corporations have been given, over the past 5 years free reign over broadband in the US this while the rest of the world moves forward with national broadband infrastructures that are far superior to ours.
Consequently the telcos and cable cos are fighting over backward versions of something that is the 21st century equivalent of our 20th century interstate highway system something without which we cannot compete in a global economy. They are telling the entire nation that they will have it their way or not at all as they use their billions to take to courts any local group of citizens that dares to develop local initiatives to build their own infrastructure.
They use their cash to manipulate the political and regulatory process. They have paid for creation of an environment favorable to themselves. They have made it clear that will have it their way and will build us a rutted toll road or nothing at all
Just how stark that manipulation has been is shown in a new book by Bruce Kushnick, 200 Billion Dollar Broadband Scandal to be published as an E-book at the New Networks web site by January 30, 2006. Bruce makes the point that we are on the razor’s edge. We have essentially lost the broadband Internet needed to be competitive in the global economy. Whether we can gain it back depends on whether public interest groups like Bob McChesney’s FreePress and John Podesta’s CAP can join with bloggers and the regular press to drum sufficient outrage into the public at large and have that spill over into a Congress that currently is basically anesthetized by Bell contributions.
Moore's Lore blog
January 21, 2006
Posted by Dana Blankenhorn
NOTE: The following entry is being mirrored at the new Infrastructure Held Hostage blog.
We live in an uneasy relationship with the past. (Photograph courtesy RPI.)
The whole past is available to us, there to teach us lessons, to give us Clues that can help us avoid yesterday’s mistakes.
We can find multiple analogies within it. While our politics may seem, to some, analogous to those of the early years of the Cold War, in terms of technology they’re far more like those of the early Progressive Era, the early 1900s.
So imagine if the railroads of that time controlled all the roads.
That’s precisely what AT&T and Verizon, aka Bell East and Bell West (making Qwest and BellSouth into Bell North and, what do you know?) are doing to the Internet right now.
Jay Gould should have been so clever.
They’ve gotten away with it (so far) because the Internet uses the old phone network (cars using the old railroad tracks) for transport. As with railroad tracks and cars, the phone network brings irrelevant, even obnoxious, artifacts with it.
Take out the frequencies used for phone calls (which you can easily do with VOIP) and your DSL line could handle up to 7 Mbps down, no problem, without changing out the underlying technology.
Still don’t believe me? If you have a home LAN (and millions do) you’re assigning IP addresses to each PC on the network, creating your own private Internet.
Your transport to the Internet backbone could be delivered just as easily with a cable modem as with the phone.
* When the cable company offers you phone service they’re not rebuilding the old infrastructure, just modeling it on data.
* Internet transport could be delivered over power lines, and where my inlaws live, in Flatonia, Texas, it is.
* Internet transport could even be delivered using radios, through a Wireless ISP (WISP) using the shared unlicensed WiFi frequencies your home network (and garage door opener, and cordless phone) use.
Whether that WiFi cloud is owned by your city or a private company is irrelevant – it would work.
Many large companies create their own networks, linking to the Internet only at competitive peering locations where they can get the best prices on fiber transport. Long distance fiber remains a competitive market (for now). Their fear is that, with so much of the U.S. transport market now held by the Bells, their prices could be squeezed just as yours are.
Given that the cable operators have powerful lobbies, and cable does not cover everyone, the phone companies are, in their own lobbying for privilege, allowing them to exist. It’s also convenient. Their current efforts at “improvement” are aimed solely at delivering TV to homes, as cable does, not at improving Internet service.
By allowing this dual-monopoly on consumer Internet transport, or duopoly, the cable and phone monopolies mask reality. Having a choice between only cable and a Bell for ISP service is like having a choice between only Coke and Pepsi for the liquid you need to live. It’s a false choice.
In his book $200 Billion Broadband Scandal, Bruce Kushnick details how we got from the open, competitive market of 10 years ago to today’s duopoly. But I’m more interested in how we get out of this, and what a truly competitive Internet market might look like.
The first Clue is for you to understand that the Bells don’t need to exist. If the Bells went under, and their networks sold to the highest bidders, people would operate it. They would get together and interconnect their networks. They would provide service, with the current capital written down to its real value.
The second Clue for you to understand is that the alternative to monopoly isn’t communism, but competition. If the Bells had to wholesale their networks, as they did under the 1996 Telecommunications Act, that would be fine. If a federal law allowed cities to build their own Internets, that would be enough. If the Bells were only required to share their poles with Wireless ISPs and other competitors, even at a small profit over cost, that would work, too.
The third Clue for you to understand is that the present system is not tenable. Despite their success in creating an Internet duopoly, Verizon and AT&T are each worth about 40% less than they were just five years ago. The old phone network, based on wires, poles, and switches that must be written off over 20 years or more, cannot survive in a world of Moore’s Law where cheap radios and shared fiber can do the same thing. The only way they can survive is through laws that mandate you pay them whatever they demand, for whatever they choose to give you. It’s almost like the government forcing you to buy cigarettes.
Imagine if cars could have been forced to run on rails 100 years ago, and pay monopoly rail rates for the privilege. Any nation which had merely built roads would have buried us long ago. All the economic progress of the last century would have been impossible.
That is just what is happening. The Internet is the new road network. Your PC, your laptop, your PDA, your cell phone, that’s a car.
Don’t let it be crippled. Let the Bells die a natural death. Make them, by refusing to allow continued government life support, by pulling that plug of coercion that keeps them alive.
Free the Internet for competition.
Infrastructure Held Hostage blog here