Re: The United States is facing a crisis in broadband connectivity - again the madness of same old

[David Farber <dave () farber net>]

Agreeded  djf
________________________________________
From: Bob Frankston [bob37-2 () bobf frankston com]
Sent: Friday, February 01, 2008 10:26 PM
To: David Farber; 'ip'
Cc: 'Dewayne Hendricks'; Bill St. Arnaud
Subject: RE: [IP] The United States is facing a crisis in broadband connectivity - again the madness of same old

Oy again �C "The challenge with broadband in North America is lack of facilities based competition. What we need to 
find out is why the big telcos and cablecos are not deploying infrastructure in their competitor's territory?”

Duh. Do I need to again point out that the reason we don’t see a lot more deployment is because the carriers are not 
stupid and they learned the lesson of the fiber bubble -- abundance is their enemy so they need to be very careful to 
avoid excess capacity which will drive their price below their cost. Tim Wu called our current system of 
government-charted companies privateer funding �C he used the example of the East India Company but I prefer to use the 
example of Sir Francis Drake raiding Spanish shipping for the booty.  A while back I pointed to a Reason Magazine 
article arguing that the Dumont network had to die in the early 70's because the FCC deemed that the marketplace could 
only support three TV networks.

I agree with Bill St Arnaud that we should be skeptical about massive government projects �C especially when they 
inherently at cross-purposes with the idea of the Internet connectivity. All the value is in the externalities which is 
why funding the transport in isolation doesn’t make any sense. There is no value in the network itself �C just in the 
use of the network and that value shouldn’t be trapped by the network.

The reason Utopia, and other efforts are in trouble is because they are simply mini-bells but without the scale to hide 
the dysfunctional aspects of such funding. They don’t provide local abundance or much advantage, if any, over the large 
carriers with deeper pockets. They are also don’t take advantage of fungible connectivity and instead build redundant 
infrastructures without protocols to enable meshing outside their infrastructure. We also confuse speed with value so 
pay a lot for now and lock us into the present �C I’m willing to start out with less to drive a dynamic that will give 
us gigabits and more. Note that the fiber proposals mention nothing about wireless connectivity.

When will it become obvious that you fund common infrastructure as infrastructure. This is local infrastructure funded 
locally (at scale) and not that old idea of a natural monopoly run by a benevolent Ma Bell or, worse, an intelligent 
regulator. With aligned incentives we don’t need to worry about broadband because we get Moore’s law type hyper-growth 
as soon as we decouple the physical infrastructure from our use of it. We also can evolve solutions rather than having 
the imposed.

We don’t need theory because we see this happened whenever there was the opportunity �C the fiber bubbled show what 
happened when the Telcos didn’t carefully manage availability. And we have gigabit home networking wired and 100Mbps 
unwired with no incremental cost vs. broadband which is limited and expensive. And the examples go on and on.

Why spend $100,000,000,000 when we can light up the existing copper and get immediate connectivity everywhere for 
almost nothing �C especially if funded locally and if we can update the software in access points to provide access the 
nearly 100% wireless coverage we already have? Again, I’m not arguing for Cioffi’s 100Mbps over copper �C that’s 
possible but even at modest speeds we get most of the value and we drive the dynamic.

The fiber proposal reminds me of structured wiring designs from the mid-90’s �C it specific coax fiber bundle homeruns 
throughout the house. I called it structural wiring because it could hold up the house by itself. Turns out that all 
the gigabit networking used thin copper and none of the bulky stuff! Speed is nice but people will pay for it locally 
once they start understanding connectivity but for now providing a few megabits on DSL while using the existing cable 
infrastructure for television is a far better strategy. $1e11 might seem much but why waste it?

So why do we keep trying harder and harder to do what we know can’t work because the incentives are 180°s out of 
alignment?

So why we are showing the signs of madness by taking a system that is inherently nonviable and roundup the usual 
suspects and telling them we’ll pay them to destroy the value of their business. Fiber is a wonderful transport �C 
especially if it complements wireless. But it’s not the end-in-itself. It’s just a technology �C the issue here is 
aligning incentives.

PS: As others have noted we need to be careful playing the gap game �C I argue that the European deployments still 
suffer the Minitel problem of being wonderful solutions lacking the dynamic to move beyond their design point but 
perhaps they will figure it out and make the fiber available as such and that’s when we should really worry because it 
will be a repeat of the dynamic that gave the US the advantage in the days of the dial-up Internet. Remember that it 
was dial-up, not high speed, that gave us today’s Internet.

Look at the chart of broadband speeds only adds to the confusion. Reminds me of visiting Nigeria in the 70’s �C lots of 
very high speed 4 lane highways connecting nothing to nothing.

PSS: Can we stop using the offensive term “Lawful uses”? There was a reason we added the Fifth Amendment to the US 
Constitution! Next we’ll hear about lawful free speech.

http://www.frankston.com/public




-----Original Message-----
From: David Farber [mailto:dave () farber net]
Sent: Friday, February 01, 2008 20:03
To: ip
Subject: [IP] The United States is facing a crisis in broadband connectivity







Begin forwarded message:



From: dewayne () warpspeed com (Dewayne Hendricks)

Date: February 1, 2008 12:03:35 PM EST

To: Dewayne-Net Technology List <xyzzy () warpspeed com>

Subject: [Dewayne-Net] The United States is facing a crisis in

broadband connectivity



[Note:  This item comes from Bill St. Arnaud's list.  DLH]



From: "Bill St.Arnaud" <bill.st.arnaud () canarie ca>

Date: February 1, 2008 8:14:13 AM PST

Subject: [CAnet - news] The United States is facing a crisis in

broadband connectivity



For more information on this item please visit my blog at

http://green-broadband.blogspot.com/ or http://billstarnaud.blogspot.com



-------------------------------------------



[Here is an excellent report by Educause on the state of broadband in

the USA and a comparison with other countries. It is interesting that

the report points to Canada (which has fallen further behind then the

US in terms of broadband deployment) as possible model for deploying

broadband. Although I agree that broadband is critical economic and

social enabler I remain skeptical of government funded solutions,

except perhaps for providing basic infrastructure such as conduit and/

or dark fiber. Several municipal and government funded broadband

initiatives are in already in trouble such as Utopia, Philadelphia

WiFi and South Dundas (which is paradoxically is cited as good example

in this paper).



The challenge with broadband in North America is lack of facilities

based competition. What we need to find out is why the big telcos and

cablecos are not deploying infrastructure in their competitor's

territory? They seem to have no problem deploying nation wide wireless

networks, but nobody wants to make the make investment in nation wide

broadband in direct competition with existing incumbents. What are the

hurdles? Is broadband a natural monopoly? Do we need to encourage

alternate business models, through regulation, tax incentives or other

means? More distressing - why aren't consumers complaining? Why is it

that the nation that exemplifies free enterprise and

entrepreneurialism, the nation that created Google, Yahoo, Apple

Microsoft and host of other world beating companies, cannot find a

truly competitive business model that will enable the build out of a

national broadband network for the world's richest nation? --BSA]





http://arstechnica.com/news.ars/post/20080131-fixing-us-broadband-100-billion-for-fiber-to-every-home.html





Executive Summary



The United States is facing a crisis in broadband connectivity. The

demand for bandwidth is accelerating well beyond the capacity of our

current broadband networks, especially as video traffic and home�\

based businesses become more prevalent. In the very near future, a

single family will be watching HDTV video at the same that they engage

in remote health monitoring, videoconferencing, gaming, distance

education class lectures, and social networking. Moore's Law, as well

as several studies of future Internet growth, predicts that homes and

businesses will need a minimum of 100 megabits per second (Mbps) of

capacity within the next three to five years and will need even

greater capacity going forward.



While other nations are preparing for the future, the United States is

not. Most developed nations are deploying "big broadband" networks

(100 Mbps) that provide faster connections at cheaper prices than

those available in the United States. Japan has already announced a

national commitment to build fiber networks to every home and

business, and countries that have smaller economies and more rural

territory than the United States (e.g., Finland, Sweden, and Canada)

have better broadband services available.



Why is the United States so far behind? The failure of the United

States to keep pace is the direct result of our failure to adopt a

national broadband policy. The United States has taken a deregulatory

approach under the assumption that the market will build enough

capacity to meet the demand. While these steps may have had some

positive influence, they are not sufficient. The profit/loss

statements of individual firms fail to take into account the positive

externalities from a widely deployed broadband network, including

economic growth, lower�\cost health care, and higher�\

quality education. In contrast, most other nations treat broadband

services as necessary infrastructure; their governments adopted

explicit broadband stimulus plans at the turn of the century, and

their countries are now reaping the benefits.



The United States needs to take aggressive action to significantly

expand our broadband connectivity. Now is not the time for incremental

improvements; we are behind, and we must adopt a comprehensive

strategy this year if we are to address the growing needs of our

citizens and our economy. U.S. policy must be forward�\looking-we

must "skate where the puck is going to be." For these reasons, this

paper proposes the creation of a new federal Universal Broadband Fund

(UBF)that, together with matching funds from the states and the

private and/or public sector, should be used to build open, big

broadband networks of at least 100 Mbps (scalable upwards to 1 Gbps)

to every home and business by 2012. U.S. state governors and foreign

heads of state have found the resources to subsidize broadband

deployment; the U.S. federal government should as well.



Building a local fiber connection past each home and business will

cost approximately $100 billion. The paper recommends the public�\

private partnership approach followed in Canada, where one�\third

of the funding would be provided by the federal government, one�\

third by the states, and the remaining one�\ third by the private

and/or public sector. It thus proposes a federal fund of $8 billion

per year for four years, to be distributed to the states once they

provide their matching amount of funding. Each state would then

combine the federal and state funding and award grants to individual

entities (public or private) that provide the remaining one�\

third of the funding to build open, big broadband capacity on a

community�\by�\community basis.



While the initial investment is significant, the returns would be

enormous. First, a big broadband network would be less expensive to

operate than the existing copper network, resulting in actual cost

savings of several billion dollars per year. More important, the

availability of broadband capability would generate enormous economic

activity (both from building the network and from its use) that would

lead to greater tax revenue and economic growth. Furthermore, fiber

networks are scalable upwards to an almost unlimited capacity; the

investment in building these networks may provide adequate broadband

connectivity for several decades. Finally, once the networks are

built, the need for additional funding would end, and the private and/

or public entity that receives the funding would own and operate the

network without the need for ongoing federal subsidies.



A critically important component of this grant program is that the

networks built with UBF funding must be open and accessible to all

users and content and application providers. The taxpayer is entitled

to certain rights in return for providing two�\thirds of the

funding to build these networks. Thus, the entity chosen to build the

network in each community would maintain both an open network for all

lawful uses and affordable pricing, and may be required to make a

portion of its capacity available on a wholesale basis to competing

retail service providers.



While federal funding and openness are fundamental, other components

of a comprehensive broadband plan are equally vital. The plan must

include the coordinated effort of our elected leaders and must be

implemented by a core of federal, state, and local officials, with

guidance from an advisory committee of commercial and nonprofit

institutions. The plan should include tax incentives to spur private

sector broadband investment and should encourage public sector

investment by municipalities and states as well. Efforts should also

be undertaken to ensure that the public is made aware of the

availability of these broadband services. Funding should also be

provided to bolster U.S. investment in long�\term

telecommunications research. The U.S. broadband crisis is a unique

challenge. Unlike past threats to our future competitiveness, the

solution to our broadband connectivity crisis is primarily local. The

benefits of broadband connectivity are felt directly by every consumer

and business, and final decisions must involve our local leaders under

a comprehensive federal program. The United States needs to move

beyond the rhetoric and begin to adopt a specific action plan for the

future. EDUCAUSE looks forward to comment on this proposal and seeks

to join with others in improving our national broadband connectivity.





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