Is competition likely in U.S. broadband?

[David Farber <dave () farber net>]

________________________________________
From: Brett Glass [brett () lariat net]
Sent: Friday, July 25, 2008 12:34 PM
To: David Farber; ip
Subject: Re: [IP] Is competition likely in U.S. broadband?

At 04:41 PM 7/24/2008, David Burstein wrote:

> I've asked top Wall Streeters including Simon Flannery and Dan
> Reingold about this, and the uniform answer is another broadband
> carrier almost certainly could not be funded, except in wireless.

David, Karl, and everyone:

Why one other?

Perhaps because of their focus on big businesses (whose lobbyists
they most often see in DC), Federal lawmakers and regulators seem
blind to the fact that users consistently agree that the best
"third pipe" (especially a wireless one) is not a single carrier
but many, many small ones which know their communities, are close
to their users, and can provide the hands-on, personal service
which does not scale and hence will never be provided by the large carriers.

My 16 years' of experience as an independent wireless ISP has
demonstrated again and again that many if not most citizens want a
small, local carrier, which supports not only their Internet
connections but also other needs (such as computer security, home
networking, technical help, etc.) as an option. Such carriers are
more like electricians, plumbers, or hair stylists than like
Wal-Marts. Why? Because the solutions they provide are customized
and do not lend themselves to impersonal mass production.

Yet, Federal policy hobbles -- in fact, all but disables -- such
carriers. It's possible for anyone who's qualified to get a license
to be an electrician or plumber. But just try to get a license for
"local" wireless spectrum -- enough to provide several hundred
megabits of service to your local community or perhaps your county.
You cannot do it, because the auction process -- which favors
nationwide corporations and wireline carriers with a motive to
pre-empt local competition -- is designed so that no local, small
business need apply. It can never win.

Likewise, national broadband policy is not designed to ensure that
local providers can gain access to the backbone, and in fact is
increasingly signaling to the larger carriers that they can feel
free to cut such providers off. Backbone providers often make it
difficult or impossible for companies which are not ILECs or cable
providers to connect, especially in rural areas, where they refuse
even to deal with companies in the areas through which their pipes
pass. And the ILECs, also to forestall competition, are not
required to offer the leased lines used for backhaul at a fair
price (or, perhaps, at any price), despite provisions of the
Telecommunications Act of 1996 which were intended to ensure this.
The result: local providers are disadvantaged on both the upstream
and downstream sides, and increasingly so.

An effective national broadband policy wouldn't strive to create a
single "third provider" (as in the M2Z proposal), but rather would
be tailored toward letting tens of thousands of small providers
bloom. Again, as the world's first wireless broadband Internet
provider, and a local one who LIKES being local, I see how much
users want, need, and deeply appreciate such service. Yet, every
day, I see developments which seem intended to ensure that we
cannot prosper, much less provide the needed choices that Americans
want. Why? And how can we turn around the relentless push BY
GOVERNMENT toward duopoly, despite the efforts of small, plucky
entrepreneurs to provide what the people want?

--Brett Glass, LARIAT.NET




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