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Universal Broadband

New Circular Logic Doesn't Justify Wireless Net Neutrality

There is a new circular logic argument being offered that in effect takes fast rural deployment of broadband hostage to the net neutrality movement's latest demands for net neutrality to be put above all other broadband or Internet goals.

  • A post by Stacey Higginbotham of Gigaom effectively connects Free Press' latest demand that the FCC apply net neutrality to wireless for the first time and argues in her post that if wireless providers are allowed to apply for stimulus grants for rural broadband without mandated net neutrality, they somehow could control what a subscriber could access on the Internet.


Hopefully, the FCC, NTIA and RUS folks that are working on this won't waste time running in circles trying to make sense out of this new circular logic.

  • It is not a new argument. And it is not logical.
  • It's simply an assertion dressed up as an argument that net neutrality should be the supreme concern, and come before, and be above, all other broadband or other priorities, like economic growth, job creation, broadband deployment/investment etc.

How is this circular logic that doesn't make sense?

House Chairman Boucher on Net Neutrality

House Internet Subcommittee Chairman Rick Boucher had the following to say about the net neutrality issue in an informative interview with Broadcasting & Cable:

  • "Do you believe there still needs to be a network neutrality law?

    • There has to be a firm principle of Internet openness that is abided by all. We do not have a legislative emergency at this moment that requires that as a priority today—in the top rank of priorities for action in the next several months—that we pass legislation such as was considered a couple years ago. I think because we elevated the issue, we showed the depth of concern for that business model. The plans to do that were effectively chilled, and so that hasn’t happened and the Internet has remained open.
    • And in those instances where there have been some eruptions of bad behavior, the FCC has acted very effectively to prevent that activity and keep the Internet open. The status quo is working."  






Building upon a Strong Broadband Foundation -- Part I in America’s Broadband Strengths Series

The combination of the severe recession and Congress’ requirement for the FCC to devise a National Broadband Strategy provides an excellent opportunity to inventory not only weaknesses, but also the many strengths, of the broadband sector and economy. Comprehensive analysis shows much that is going well that mustn’t be taken for granted in any new broadband plans. Unlike many other sectors of the economy, the American broadband sector is:

  • An exceptionally strong foundation to build upon;
  • On the right track with much positive momentum; and
  • Partnering to solve many of society’s most pressing problems.


I.          Strong Foundation to Build Upon


America’s competitive broadband market has an exceptionally strong foundation of positives on which to build upon, enhance, expand and supplement.


The Flawed Economics of Broadband Open Access in the U.S.

A post by a Google policy analyst yesterday attempted to make the economic case for open access in the U.S. and suggested reasons why American infrastructure providers should embrace a mandated open network model. This proposed theory warrants a strong practical rebuttal. This proposed case for the economics of open access does not hold up to close scrutiny, because it has fatal flaws in both logic and economics.


I.                   The fatal flaw in logic in the case for the economics of open access:


Since the post assumes broadband markets everywhere are basically the same, it concludes that the open access experience in some European countries is relevant and applicable to the U.S. situation. The fatal flaw in logic here is the core assumption that European and U.S. markets are factually analogous. They are not. They are substantially different factually and structurally as I will explain in detail.

U.S. Leads World in Broadband Affordability per New ITU Data -- Competition works!

America's longstanding bipartisan policy commitment to promote broadband competition has succeeded in making broadband more affordable in the U.S. than any other country in the world according to the ITU. 

  • Data in a broad new study by the International Telecommunications Union (ITU) of 150 countries, show the U.S. substantially in the world lead with the lowest broadband prices as a percentage of per capita GNI. (See the tables on pages 56 and 66.)
    • Interestingly, the data show broadband in the U.S. is 2.5 times more affordable than Japan, and three times more affordable than South Korea and France (p. 66).    

I.  This is the sixth independent study that undermines the assertion that America is not a worldwide competitiveness leader in the converging sector of Internet, broadband, communications, and information technology.    

US-Broadband-falling-behind orthodoxy challenged again! America #1 in new Connectivity Scorecard

Kudos to Saul Hansell of the NYT Bits blog "Surprise: America is #1 in Broadband" for spotlighting yet another respected source that challenges the political orthodoxy that America is falling behind in broadband/Internet competitiveness.  

  • Of course, GigaOm responded angrily with a "Broadband Damned Lies Edition" post.
  • Why is there such vitriol against reporting that the U.S. is not doing dismally in technology?
    • My explanation is that unless those who favor government intervention to mandate a digital commons (see neutralism white paper) can convince everyone that the current competitive Internet market is a dismal failure, they know it will be harder to get net neutrality legislation/regulation passed.
    • It is a perverse situation indeed when some Americans appear to desperately want America to fail, (so much so as to ridicule legitimate research and reporting) so that they can justify changing public policies. 

There are now four different non-American research efforts that have concluded that the U.S. is not falling behind the rest of the world when it comes to broadband/Internet standing. These findings are in stark contrast to the OECD, which in one of many OECD measures has the U.S. at 15th or 22nd in the world on broadband penetration. 

Net neutrality in House stimulus package is status quo

Initial takes that the inclusion of net neutrality language (p. 53) in the House stimulus appropriations package is highly significant -- are overblown. It is basically an affirmation of the status quo. 

Why the significance of the House appropriations NN language is overblown:

First, this language is very narrowly targeted (p. 51) at "basic broadband service in unserved areas, and advanced broadband service in under-served areas" i.e. where competition has not emerged because the extremely low density is not economic.  

  • It should be of zero surprise that where there is no broadband, no competition, or little prospect of competition because of low user density -- that the Government would have clear operating expectations that these networks operate openly as competitive networks do.

Second, this is not regulation; it is a voluntary grant program.

  • There is no regulatory mandate for net neutrality here.
  • If an entity wants to use the taxpayers' money on building a network that is almost by definition not driven by economics or return on investment -- it is perfectly reasonable and responsible they must agree to the appropriators' conditions.  

Third, mainstream broadband providers are highly un-likely to apply for these grants.

Why net neutrality regulation would undercut Universal Broadband progress

The start of robust broadband deployment in the U.S. was delayed for several years in the late 1990's because of regulatory uncertainty over whether broadband investment could earn a competitive return.

  • Today's release of the proposed economic stimulus package is extremely relevant to the question of investment in Universal Broadband; it says: "For every dollar invested in broadband, the economy sees a ten-fold return on that investment."
  • Recent guidance from the OBama transition team spearheading the Universal Broadband effort is also encouraging. At the State of the Net Conference, Blair Levin said: "You don't want to do anything that makes a competitive market more difficult."  

The 'open' question for the new Government is whether open Internet means promoting the consensus goal of expanding Internet access to all Americans through expanding broadband deployment and adoption, or whether open Internet means transforming the Internet from the current voluntary commercial cybrastructure to a regulatorily coerced and dictated cybrastructure.

  • As I explained in my analysis on this topic last week about the proverbial wisdom -- "chase two rabbits, catch none" -- net neutrality and promoting universal broadband are opposite policy goals -- "broadband rabbits" running fast in opposite directions.     

So what uncertainty is hanging over the Universal Broadband goal?

The "Cybrastructure" Stimulus

Let me offer a new organizing term -- "cybrastructure" -- to describe the myriad of digital investments being discussed in the pending economic stimulus package.

Its odd to me that with technological convergence, the Internet which interconnects all things digital, the evolution towards cloud computing and smart power grids, the digitizing of health records, and the promotion of universal broadband deployment and adoption, etc. -- that there is not a holistic term describing all the different but inter-related infrastructure investment involved that is being enhanced. 

  • What's missing from the discussion of all the separate infrastructure component parts is that the sum is greater than the parts.
  • That's because different types of digital infrastructure have beneficial network effects between and among them -- and those collective network effects create something new that deserves a new name -- "the new and improved national cybrastructure."

The term "cybrastructure" captures all the different kinds of digital-related infrastructure being discussed in the multi-hundred billion dollar economic stimulus package designed to jumpstart economic growth, create jobs and promote investment quickly and for the long term. 

Hopefully the stimulus will produce a more cohesive, powerful and effective national cybrastructure -- which enables growth and a host of new efficiencies, advances, innovations and benefits.


Google uses 21 times more bandwidth than it pays for -- per first-ever research study

Below is the press release for the first-ever research study of U.S. Consumer Internet Usage and Cost which I authored.

The 27 page research study can be accessed at this link:

For Immediate Release December 4, 2008

Contact: Scott Cleland 703-217-2407 

First-Ever Study of U.S. Consumer Internet Usage and Cost Finds

Google Uses 21 Times More Bandwidth than it Pays For

Google uses 16.5% of U.S. consumer Internet capacity today, rising to an estimated 37% in 2010