Here's a question: should the decision to build the Net to maximum
capacity--the broadest we can make broadband--be based on whether or not
today's carriers can think of a way to pay back the cost of building it?
While we're answering that, let's ask if the Net should be private at
all. Are the rivers and seas private? How about the Interstate Highway
I pondered these questions this past Wednesday while on the plane home from a series of
industry events. At each of these events, nearly everybody had a laptop,
and nearly every laptop was connected to the Net. And everybody experienced
frustration with connection speed. Slow Net connections are to industry
tradeshows what traffic tie-ups are to Los Angeles.
On my own laptop, at 38,000 feet over the southwest desert, I read and
Question Bell Investments", written by Ted Hearn and
published in Multichannel News. It's a report on what financial market
analysts told the Senate Commerce Committee, which is expected to vote
soon on a bill that would, in the story's words, "ease phone-company
entry into cable markets and perhaps include network-neutrality
At issue in the story is whether and how carriers can make profits by
investing in additional broadband infrastructure. It begins:
Wall Street analysts told a Senate committee Tuesday that the
billions of dollars being spent by AT&T Inc. and Verizon
Communications Inc. to compete with cable might not produce a profit.
"There is a high degree of skepticism that the substantial
investment underway at the [phone companies] to deliver broadband
networks to the home will deliver a satisfactory return on the
incremental investment," said Luke Szymczak, vice president of
JPMorgan Asset Management.
AT&T and Verizon are installing high-capacity fiber lines to rapidly
deliver voice, video and data in a high-stakes battle with cable.
Note how the story is framed. It suggests that the only way phone
companies can make money is by competing with cable. One level up from
vendor sports, this is Industry War over turf defined by each industry's
incumbent categories: cable TV delivery on one side and telephony on the
other. "The battle between cable and the phone giants has put sharp
pressure on the stocks of both industries", Hearn writes.
Of course it has; neither industry can imagine anything
beyond expanding at the expense of the other. Phone companies want to
get into the new cable business called "content delivery". Cable
companies want to get into the new phone business called VoIP. Both want
regulatory relief from restrictions on their abilities to take business
away from each other in a zero-sum turf war whose perimeter is defined
by "content delivery" and VoIP.
Both agree about two things, however. One is revenue can be found in
premiums charged to the likes of Google and Yahoo for higher guaranteed
bandwidth. The other thing they agree is Net Neutrality, preventing bandwidth advantages
or restrictions based on the sources or contents of Net communications,
is a Bad Thing. To them, it limits the ability of carriers to obtain
returns on investment by, well, selling premium services to Google and
Thus, Net Neutrality (see
vs. Net Neutering") is cast as something opposed to
business--"government interference", essentially.
Hearn goes on:
"The costs of these networks are far beyond what the returns of the
new services can provide," said Craig Moffett, VP and senior analyst
of U.S. cable and satellite broadcasting at Sanford C. Bernstein
Aryeh Bourkoff, managing director at UBS Warburg LLC, expressed
concern about the regulatory climate facing cable after the industry
invested more than $90 billion on network upgrades to roll out
digital TV and high-speed-Internet access.
He referred to possible network-neutrality and a la carte
programming mandates, as well as less burdensome franchising
requirements on phone companies, as negatives for cable.
"As media consumption over the Internet develops at a rapid pace, I
believe it is too early to introduce regulation on key issues such
as a la carte pricing and packaging and on net neutrality, as the
market is still in its early stages," Bourkoff said.
Moffett, an opponent of network-neutrality mandates by government,
warned that if network owners were barred from creating a "fast
lane" on the Internet to generate more revenue to cover capital
expenditures, they would have to recover much, if not all, of their
cost from subscribers, whose monthly bills would likely rise
"Mandated net neutrality would further sour Wall Street's taste for
broadband-infrastructure investments, making it increasingly
difficult to sustain necessary capital returns, and it would likely
mean that consumers alone would be required to foot the entire bill
for whatever network investments do get made," Moffett said.
Investors dislike policy upheavals in Washington that distract them
from focusing on market fundamentals, said Kevin Moore, wireline
telecom analyst at Wachovia Securities.
"We have enough to worry about in considering the rapidly changing
competitive and technological environment. In other words, we want
regulatory stability and certainty," Moore said.
Summary: 1) the only returns on investment will come from known sources
of revenue; 2) the only additional revenue will come from shaking down
large content sources for higher carriage payments; 3) Net Neutrality is
a Bad Thing.
Is this how we want the Net framed?
How about framing the Net as rivers and oceans, which nobody owns and
which float everybody's boat? Or how about framing the Net as public
land? That's how Susan Crawford puts it in
There are a couple of reasons why we have national parks and access
to the seashore. Some things are so much the gifts of nature that
they should be reserved for everyone. And some things (like the sea,
and like the Internet) are so important to each of us that keeping
them freely available makes us a group of citizens rather than
Now--the internet wasn't created by nature; it's an agreement
between machines made possible by the designers of that agreement
(or protocol). But it is a great gift, and it is very important to
being a citizen, and for these reasons it is owned by all for common
use. It's a commons, like the Boston Common. And no sovereign ever
showed up to which the people who "own" the internet (that is,
everyone) surrendered their ownership.
How about framing the Net as the "Information Highway" that became a
cliche (without ever quite happening) a decade ago? To get what I mean
by that, consider what the US would be like today if we hadn't created
the Interstate Highway System fifty years ago. What would the lack of
Interstate Highway infrastructure have cost us by now? Where would
Germany be without the Autobahn? How about Switzerland without its rail
system? How about any great city without its international airports?
to Wikipedia, the Interstate Highway System cost $114 billion
to build. Can we even begin to calculate what it would cost us today
not to have it? Or to estimate the cost of building it now? We need people
with imagination talking to Congress, not just carriers and Wall
Street analysts. We need to tell Congress what kinds of activity and
what kinds of business are made possible by a public Internet with
maximized capacity. What boats get floated by symmetrical 100Mb or 1Gb
bandwidth to homes and businesses?
At BarCamp in
Austin last Saturday, Wayne Caswell of
CaziTech gave a
detailed presentation that argued for public broadband
infrastructure and for imagining its benefits. He went beyond the
obvious and listed its benefits to education, healthcare, lifestyle,
governance, national security, photo and video sharing, live
teleconferencing, remotely served real-world simulations,
hyper-realistic multiplayer gaming, organic LEDs bringing HD pictures to
handheld devices, Ultra HDTV, distributed immersive theater, signing and
lip reading for the deaf, telepresence, collaborative synchronized music
performance across any distance. And he mentioned one that stood out for
me as a guy who follows Linux: worldwide grid computing "with massive
computational power that far surpasses that of a handful of
supercomputers", resulting in science breakthroughs out the wazoo.
These benefits alone dwarf advances made possible by oceanic transport
or the Interstate Highway System.
We need to add our ideas to Wayne's and bring them not only to Congress,
but to the carriers and to one another. If we don't, we risk relegating
the Net to backroads maintained in perpetuity by the lamest and least
imaginative industries of our time.
Doc Searls is Senior Editor of Linux Journal, for
which he writes the Linux for Suits column. He also presides over
Doc Searls' IT Garage,
which is published by SSC, the publisher of Linux
Journal. He recently was named CITS Fellow
of the University of California, Santa Barbara. He can be reached at
Doc Searls is Senior Editor of Linux Journal
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