Thinking About A National Broadband Plan

from the not-too-hopeful dept

Thu, Apr 9th 2009 12:55pm — Mike Masnick

When we first heard about President Obama's "broadband" stimulus, we worried that it was nothing more than a boondoggle for incumbents rather than an actual broadband plan. One of his top advisors, Blair Levin, effectively acknowledged that by admitting that the stimulus package really had little to do with stimulating broadband, and a lot to do with stimulating jobs. As such, they were a lot less interested in disruptive innovation, and a lot more interested in projects that would require hiring tens of thousands of people to dig ditches (though, it's worth pointing out that the broadband stimulus has enough strings attached that the incumbents appear to be balking at it). However, Levin said that a real broadband plan would be coming up soon enough.

And, in fact, reports are now coming out that the administration has gone to work on creating a real national broadband plan. As with all things, the devil will be very much in the details. There is some fear that a "national broadband policy" won't mean much more than to hand Connected Nation a lot of power, which would do little to help things. Connected Nation is an incumbent-backed operation that gives off the appearance of "mapping" broadband connections, but really seems designed to deflect interest in the real issues: such as enabling real competition in the broadband space. Hopefully that's not where things go.

The good news is that (unlike with IP issues), the administration has either brought on or is working with a fair number of folks who do grasp some of the real issues here, such as Susan Crawford. So, what would a better broadband plan be? One that is focused on competition. In the Wired link above, Ryan Singel suggests that the administration look closely at the new national broadband plan announced in Australia, where the government will fund a new company to the tune of $43 billion (US) to lay fiber optics capable of 100 Mbps to 90% of all Australian homes and schools (and wireless at 12 Mbps to the other 10%). The company wouldn't be a retail ISP itself, but would then sell access to ISPs to offer competitive services on the network.

This is an idea that should be studied carefully, and is quite similar to ideas we've been discussing for years. The thinking is that high speed fiber optics represent a natural monopoly. That is, it's expensive to set up that platform, and it makes little sense to have multiple companies compete to create their own, because the negative externalities are massive (lots of companies digging up your yard to run fiber, plus too much investment with many of the companies failing). So, like the highway system, the thinking is, figure out a way to build a single system that is then open for anyone to use. Then, on top of that platform, you offer real competition, as any ISP can offer services and they can compete on real service. The idea is that, just as the interstate highway system helped enable increased shipping and travel, so too would a national fiber optic plan create increased digital opportunities. It's a compelling argument, though there are some who aren't convinced that broadband is a natural monopoly. My problem with the Australian solution is that it's too slow. It's aiming at a target that isn't fast enough, and would likely need to be upgraded too quickly. For a system like this, you need to aim as high as possible.

A more practical and politically-supportable option might be to do something more along the lines of the Homes with Tails idea, whereby we further push ownership of the connection out to the curb. The idea is that every home would pay for and own the fiber optic connection from the home to the curb (the infamous "last mile" which the incumbent providers complain is too costly to build themselves). But, then, once you reach the connection point, any service provider on that network can offer to provide service to that "tail." Again, there are many questions raised by this proposal as well, but it's an interesting one to explore and see whether or not it has any merit.

There are some other intriguing possibilities out there as well, and hopefully the administration and the FCC will explore all of these seriously. The worry, of course, is that lobbyists will get in the way, and work to make sure that any such broadband policy really just means giving them more money, subsidies and power -- rather than actually encouraging competition. So, consider this yet another opportunity to see how much influence lobbyists have over the new administration.

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Filed Under: broadband, fiber optics, homes with tails, national broadband plan

19 Comments

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Weird Harolds #2 Fan, 9 Apr 2009 @ 12:59pm

Broadband
Broadband enables theft!

You wouldn't rape your neighbors motorcycle; therefore you don't need broadband!
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Tgeigs, 9 Apr 2009 @ 1:26pm

Re: Broadband
Rape your neighbor's motorcycle? I actually laughed at that one. Bravo.
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Anonymous Coward, 9 Apr 2009 @ 1:31pm

Lobbyists
As a non-American, I cringe every time I see lobbyists mentioned. Sure they exist in other Countries but they seem to be able to influence political decision makers (elected by the people for the people!) way too much and far too often.

How do Americans feel about them? Are there any pressure groups trying to rid the political scene of them or are they going to be around for a while?

I ask because these corporate lobbyists coerce the US government into passing laws in the US that are then forced on the rest of us as conditions of "free trade".
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TheStuipdOne, 9 Apr 2009 @ 1:31pm

Last Mile Idea
I like it. The owner of a house or condo or apartment can own the line that connects the property to the 'Hub' at the curb. But it doesn't have to be that way ... a provider could build that connection and own it if the customer wants to subsidize it through higher fees or whatever.

If we had a system like this I'd be more than happy to form an ISP that sells connectivity as cheaply as possible to anyone with their own line. I'd even be willing to lay the line for them and charge them for it via a multi year service agreement with an extra charge for the line itself.
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TheStuipdOne, 9 Apr 2009 @ 1:37pm

Re: Lobbyists
Politicians always talk about getting rid of the lobbyists, but the truth is that most of them want to leave office eventually and then come back with a sallary 7 figures long as a lobbyist. That and lobbyists treat the politicians so well that it is nearly impossible to get rid of them.

Also since we only have 2 parties with any power they are not wanting to change things and risk losing their strangle-hold on the power.
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anon, 9 Apr 2009 @ 1:46pm

Re: Lobbyists
As a non-American, I cringe every time I see lobbyists mentioned. Sure they exist in other Countries but they seem to be able to influence political decision makers (elected by the people for the people!) way too much and far too often.

How do Americans feel about them? Are there any pressure groups trying to rid the political scene of them or are they going to be around for a while?

I ask because these corporate lobbyists coerce the US government into passing laws in the US that are then forced on the rest of us as conditions of "free trade".

From what I have experience with, most citizens have a problem with lobbyists in general.

the biggest problem is the lobbyist are the ones who fund election campaigns or at least are affiliated with a group that is funding the campaigns. This makes them very difficult to workaround from a political standpoint. Does an elected official take a stand against the people who not only funded his/her campaign but could very easily fund his opponents next time around, or does he/she stick with the lobbyists and take a chance at their citizens finding out that they really aren't concerned about improving the lives of those they represent?

It one of the reasons you can't trust politicians to actually improve the lives of citizens. Anyone who is able to get into a position of power has already shown that they can be bought.
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aseg, 9 Apr 2009 @ 2:05pm

Re: Thinking About A National Broadband Plan
Why do so many people think of a "National Broadband Plan" as rolling out fiber to people who already have two or more sources of broadband access? I say this as someone who lives on my state's major east-west highway but has only dial-up access, though major telecoms have promised us more for years now.

My local telecom refuses to put DSL equipment in the box that supplies me and a hundred other customers. The U.S. Rural Electrification Administration got everyone electricity and a landline phone. We need to spend our $ FIRST on an equivalent process for at least ONE broadband choice for everyone, BEFORE we give those who ALREADY have broadband even more options.
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DG Lewis, 9 Apr 2009 @ 2:29pm

Last mile != last 50 feet
The "last mile" that's the problem isn't the home to the curb; the problem is what telcos call the "feeder plant": most generically, from a "hub" point (which may be a building or may be a pedestal) to the customer's property. The "Homes with Tails" article you cite calls for a shared-ownership model for the feeder plant. Presumably, you could hire Verizon's subcontractors to build it for a cost approaching the $750 per household passed that Verizon is at. (Plus someone's got to perform ongoing maintenance - it's not a lot, but you've at least got to have someone with the appropriate expertise on call to handle any problems that arise, like backhoe fade.)

The problem is, those subs are going to expect to get paid $750 per household passed regardless of how many people actually buy into the ownership model. Figure 30% of households don't even buy high-speed internet; figure half the remainder are perfectly happy with their current provider. So to cover the cost, the remaining households are paying about $2300 to buy in. If your "over the top ISPs" charge $10/month instead of the telco/cableco $30/month, a homeowner could save $20/month. But I suspect few homeowners will want to pay $2300 up front to save $20 a month on broadband. Thus driving down your take rate, and driving up the cost of the buy in, further driving down the take rate...

What this leads to is homeowner associations with mandatory buy-ins, as part of a maintenance or community association fee. So you have to pay $15/month to the HA, even if you want FiOS or cable HSI. Which doesn't seem to me like a terrific solution to the problem.
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Overcast, 9 Apr 2009 @ 3:57pm

Must we 'socialize' everything?

Not too sure a 'Government run' internet would be a good thing, in any shape, manner, or form.
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Weird Harold, 9 Apr 2009 @ 4:15pm

We would only need a national broadband plan to help support "FREE!". That and killing copyright off completely.

The market has done a good job in most places to offer at least 2 and sometimes more internet connectivity alternatives in most urban areas, and at least to most rural areas. This isn't counting 3G and other forms of wireless connectivity. The US has way more pressing issues to screw up without sticking their officious noses into broadband and screwing that up too.
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Anonymous Coward, 9 Apr 2009 @ 5:04pm

Re:
Illinformed opinions from under the bridge.

Although, IMO, the last sentence is spot on
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Gunnar, 9 Apr 2009 @ 5:41pm

"My problem with the Australian solution is that it's too slow. It's aiming at a target that isn't fast enough, and would likely need to be upgraded too quickly. For a system like this, you need to aim as high as possible."

What's faster than fiber?

"My local telecom refuses to put DSL equipment in the box that supplies me and a hundred other customers. The U.S. Rural Electrification Administration got everyone electricity and a landline phone. We need to spend our $ FIRST on an equivalent process for at least ONE broadband choice for everyone, BEFORE we give those who ALREADY have broadband even more options."

Well, look at it this way. Instead of 1.5 mbps DSL or 6 mbps cable, your first option will be fiber at ~100mbps. The problem is that most people's options for broadband are barely broadband when compared to the top countries.
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Anonymous Coward, 9 Apr 2009 @ 5:51pm

While USF exists it's can only be shenagigans
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Anon, 9 Apr 2009 @ 6:04pm

My problem with the Australian solution, being an Australian myself, is that the plan is to sell this public company into a private one after 5 years, although I'm not sure if thats 5 years into the 8 year build, or 5 years after the 8 year build. Either way, we will end up with what we have now, a Government created monopoly (Telstra) that is now a private company with both wholesale and retail customers and no incentive to supply wholesale rates to what is in effect its competition in the retail market.
Another issue, which is really completely off topic, is the Australian Government is currently trying to get a mandatory internet filter going, to "protect the children". If anyone thinks this "National Broadband Network" isn't going to be used to try and backdoor in that hugely unpopular filter, then they're dreaming.
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aseg, 9 Apr 2009 @ 8:02pm

Re:
aseg-"My local telecom refuses to put DSL equipment in the box that supplies me and a hundred other customers...

Gunnar-"Well, look at it this way. Instead of 1.5 mbps DSL or 6 mbps cable, your first option will be fiber at ~100mbps. The problem is that most people's options for broadband are barely broadband when compared to the top countries."

But without a national commitment to universal broadband access, I'll never get "my first option," let alone any option. Without a national commitment to universal broadband access, no one is going to run fiber to my home in a rural area with a population density of 1,000 people in 60 square miles.
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One Disciple, 10 Apr 2009 @ 3:53am

Re:
What you done with the real Weird Harold? You know the Copyright pro, people(American consumer)hater.
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Septeus7, 10 Apr 2009 @ 7:32pm

Can't wait to see how they mess it up
It seems to me that whatever so-called plan they come up with will based on protecting existing monopolies and forcing Chinese styles content management system and usage austerity because them internets are so dangerous to the powers that be.

A real plan would be a tax credits and lending program for new companies to installed the best upgrades for existing infrastructure and lay down new cable. Use the terms of the tax credits and loans to help break up monopolies and create competition.

What we don't need a new federal department for the internet where clueless idiots who have never seen a fiber optic cable run around a try to install new infrastructure and tell companies how to run services.
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grungem0nkey, 11 Apr 2009 @ 12:04pm

Responding to 'Anonymous Coward': Lobbyists are hated by everyone in America except for politicians. Politicians love lobbyists because lobbyists give them money (and lots of it). And with that being said the lobbying problem in the States will never go away because the only people who benefit from the lobbyists are the people who make the laws which could limit or ban lobbying.
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Anonymous Coward, 11 Apr 2009 @ 2:07pm

Re:
Lobbyists are hated by everyone in America except for politicians.

Well, they aren't hated enough to keep people from voting for the politicians that keep lobbyists in business.

And with that being said the lobbying problem in the States will never go away because the only people who benefit from the lobbyists are the people who make the laws which could limit or ban lobbying.

Not as long as people keep voting for Republicrats (Republicans and Democrats), that is. But they probably will.
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