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The Pulpit
Pulpit Comments
August 03, 2007 -- Game Over
Status: [CLOSED]

It is still useful in the bigger scheme of things to have the diversity of the US economy where telco and cable both have connections to the home as opposed to everywhere else where there is only one.

Just like biological diversity (agreed, a rapidly disappearing thing) economic diversity is a good thing in the global marketplace.

JP | Aug 03, 2007 | 1:14PM

Maybe Google and the 700MHz spectrum will become the SoftBank of the USA.

And I'd hardly say the game is over if we don't surpass the rest of the world in broadband speeds and prices. If what we already have is good enough for our needs, we don't have to invest billions more to make it somewhat better. This isn't a war that must be won.

David | Aug 03, 2007 | 1:18PM

This should be mandatory reading for all Congressmen and Senators.

Mick

Mick G | Aug 03, 2007 | 1:27PM

Not long ago Japanese HDTV was said to be unapproachably far ahead of us (before we went digital and leapfrogged them). And Eastern Europe was absurdly behind all of us in telephone service (before they adopted wireless and made moot the wired systems).

Technology changes and capitalist systems adapt. There's no such thing as "never" catching up.

Jim Stead | Aug 03, 2007 | 1:32PM

I generally dislike government monopolies, and I think the cable and phone companies are perfect examples of why they are bad. I have believed for a long time that the answer is to restrict the monopoly as much as possible and allow competition in areas that used to be controlled by the monopolies. Currently the phone and cable companies simply have no incentive to offer better and faster broadband because they own the pipes and can control who offers services over them.

In this case that would mean forbidding companies from owning communications infrastructure and offering services over that infrastructure. There would be a few regulated companies that provide connectivity to consumers and then many companies offering Internet, phone and television over those pipes. The content providers would have to compete on the quality and price of the content, something that is not happening today. These content providers would also have an interest in pushing for more bandwidth to the consumer.

Phil Toland | Aug 03, 2007 | 1:45PM

When you look at the money spent by telcos on lobbying you can understand why we have drifted back to a situation where there is actually less telco competition than before ATT was busted up. Cable cos have consolidated too and the tweedle dum, tweedle dee communication/entertainment duopoly has left independent ISPs on life support.

I naaively thoght VZ would offer aggressive pricing when they offered FIOS in my neighborhood but $5 less than Cablevision is about as aggressive as the Swiss army.

Wireless has some potential but how agressively will VZ wireless be in VZ wireline/FIOS territory?

Google is the wildcard, they got the $$$ and they're open to trying new things - wireless, powerline etc.The Sprint/Dish/DirecTV/Google/Clearwire/Motorola WiMax amalgamation is the true wildcard IMO. Google dark fiber backbone to a microwave, millimeter wave last mile mesh using the 50,000 AMT and CCI towers and rooftops that Fibertower FTWR has access to and then using WiMax primarily for mobil use and in-building PLC (powerline) to deliver Dish/DirecTV as IPTV and high speed internet.

jc | Aug 03, 2007 | 2:01PM

I'm not that technical, but why can't wireless replace both cable and telephone?

Imagine 802.11n "like" nodes with longer range mounted on cell towers and iPhone "like" devices using VOIP over their digital ethernet circuits instead of GSM only cell phones.

Where do we get the band width? Reclaim it from broadcast TV and force those protected monopoly networks to distribute their video entertainment product via "the wire" (what ever that turns out to be) just like everyone else.

Who's going to do it? Forget about traditional carriers, they simply don't have the imagination, motivation, or project management skills. Microsoft never seems to know what to do with their cash hoard. But they probably don't have the imagination either. Google, Apple, Cisco, IBM? Maybe. Start with a small town to prove the concept, then go public.

Skip Beighey | Aug 03, 2007 | 2:29PM

So basically we should throw our hands in the air in despair? What a depressing article...so basically we're screwed and there's nothing we can do about it? Come on Cringe, there's no idea of any sort of solution in that head of yours??

Pete | Aug 03, 2007 | 2:30PM

One of the many things that I've been involved in over the past few years is to make working life for corporate knowledge workers easier on the "work-life-balance" front more bearable - primarily by setting up broadband at home for them, wholly subsidised by the corporation, and using imaginative ways to hide it from the taxman as in the UK, it would be considered a perk.

On one particular newish estate in the UK, BT decided to provide fiber-to-the door (or fibre depending on your native English tongue), which was a big selling point for the property developer.

The downside is...there is no interface available for the end user. They still have to use ADSL or Cable.

Richard Sheppard | Aug 03, 2007 | 2:31PM

Hey, whadda ya mean EVEN Canada?

Burt Brumme | Aug 03, 2007 | 2:33PM

What do you expect? Information supper highway? We can even keep our bridges up. Maybe we can out source that.

avram miller | Aug 03, 2007 | 2:40PM

You wrote "...a diverse lot including France, Iceland, Japan, Korea, Switzerland, the UK, and even Canada, are for the most part growing faster than we..."

EVEN CANADA? Really? Who'd have guessed it? I thought they were too busy chopping wood to heat their igloos to have time for the Internet.

Peter McLennan | Aug 03, 2007 | 2:42PM

I disagree with David. As time goes on and technological advances occur, we're going to need more bandwidth.

What we have right now is NOT good enough to meet our needs. It isn't good enough for IPTV, it isn't good enough for ad-hoc distributed networks, it isn't even fast enough for backing up servers over the internet. Our lackluster broadband speed is already our computing bottleneck: processors, I/O, and drives all get faster, but broadband speeds pretty much stay the same. And if you do want a WAN, it costs you an arm and a leg (compared to other countries), and takes time to setup.

As time goes on, things are only going to get worse for the U.S. as more and more services are offered by the likes of Google or Yahoo.

Mitch | Aug 03, 2007 | 2:45PM

You mentioned Peoria! Woo-hoo from a Peoria native!

Matt | Aug 03, 2007 | 2:54PM

I thought all they had up in Canada were lumberjacks and curlers. Is there running water up there? No doot aboot it!

Pete | Aug 03, 2007 | 2:55PM

Google is the wildcard here. Bob has chronicled their efferts at infrastructure and at some point they'll light up all that fiber and the idiots running the telcos and cable companies will sit scratching their . . . heads as their own businesses face the option of competing or dying. Google has the chance to be the monopoly breaker here, as they build towards creating their own monopoly!

Padre | Aug 03, 2007 | 2:58PM

So, what can we do?

I regularly email my congressional representatives about this and that. Sometimes I get a reply that indicates someone has even read my email. But not usually.

Bob Gustafson | Aug 03, 2007 | 2:59PM

One big problem you suffer from is the USA is so damn big - having driven what was Route 66 I can attest to this from personal experience. California has half the population of the UK, yet is twice the size. The logistical problems, and hence costs, are four times as bad even for one of your most developed states.

Add is a mishandled telecoms infrastructure and I can see how it could look pretty bleak.

Simon Hibbs | Aug 03, 2007 | 3:05PM

It's kind of disheartening to hear you put it in those terms - I hope we can eventually overcome the infrastructure problem. I expect someone in a garage workshop is building the next great communication device, one which will have us all laughing about this - "remember when the infrastructure was carried on wires?" Hopefully they will be able to get it to market.

JP | Aug 03, 2007 | 3:10PM

Hmmm,

Strangely enough some of the 'backwaters' of Canada probably have much better connectivity than metropolitan areas of the US. When the Canadian dollar was .69 US$ it was truly a bargain.

Saskatchewan, likely one of the most successful socialist experiments in North America (settle down Republican readers!) has several 'Crown Corporations' (US readers this means 'State run') that provide utility services such as phone, power, natural gas, etc. The telco...SaskTel ...is an interesting study. It ran thousands of miles of fibre throughout the province... in the 80s. This has provided huge bandwidth capability across this network for backhaul etc. However it did not run it to very many homes -- the internet did not yet exist.

It was also very aggressive with DSL over copper technology. To the point now that it provides HD TV over a second generation DSL upgrade. I believe SaskTel can provide 25Mb/s downstream services in metropolitan areas over DSL.

You don't always require a 'gambler', in a free market environment, to get the near absolute best in technology.

And yes there is at least one downside to this...Competitive pricing is an issue especially for business customers.

PS: We're counting on Global Warming so that we can use the wood to build wooden houses ..instead of heating our igloos with it.

S. L. Donaldson | Aug 03, 2007 | 3:26PM

The CANADA comment is not perjorative. Without going into the details, Cringe was pointing out that a country with all the structural disadvantages of the USA (large land areas, some very sparse, no central telecom authority, etc.) is able to leapfrog us because they didn't have a communication policy that prevented them.

John Light | Aug 03, 2007 | 3:26PM

Bob,

Unfortunateley for this Country, I beleive you've come the the correct realization, at least in part.

If memory serves, one of the main reasons for the original Telecom act of 1934 was to allow for the creation and regulation of monopoly phone companies. Way back then, congress came to the same realization as you have, and that is, it does not make economic sense nor is it in the public interest to build more than one communications infrastructure in a given geographic area! Therefore one must allow for one provider to build said infrastructure and regulate them. The end result being more affordable services for the end user.

I believe the regulator's policies in this Country have since run amuck, especially with regard to "fostering compitition". Because of their policies many competitve companies have or are being forced to build facilites (ie their own fiber networks) or go broke, or maybe both. Now we have multiple facilities based providers competing for the same customer group. Yes the same economic laws that moved congress to adopt the telecom act of 1934 still apply today.

This all boils down to the consumer paying for multiple physical facilities/infrastructure and that translates to a higher price for broadband.

Will we be behind forever? I still hold out hope that congress and the FCC will eventially make some changes (after the next large monopoly is broken into appropriate piece/parts) and allow this country to catch up with the rest of the world. Or better yet, technology will solve all the problems for us!

Eric | Aug 03, 2007 | 3:30PM

The BS level in this column is high even by Cringely standards. (Cringely is the first person I ever read to mention the Y2K problem. That prediction makes me very suspicious of his catastrophe scenarios.)

Those international comparisons ignore institutional connections (businesses, governments, colleges and other such). These institutions have good connections, like DS3s. These places are also the loci of much of the innovative work that keeps US companies at the forefront of innovation in terms of internet provision and content. (When was the last time you bothered to go to a Korean or Finnish website? Question Answered.) The last mile for the rest of us doesn't matter as much. Not that much has to happen on my DSL line. I simply do not do that much of value at home.

Octavian | Aug 03, 2007 | 3:37PM

As other commenters have stated, this column is built upon a faulty premise. There really is no international broadband war to be won or lost. The U.S. telcos are responding to the U.S. public's need for more bandwidth, and over time we will have what we need. Anyone can get as much speed as they need right now if they are willing to pay for it. Meanwhile, the fact that our average bandwidth speed per household is lower than other countries is really not a significant factor in the international marketplace. Most users get along just fine with the somewhat slower access speeds offered at present.

tanroof | Aug 03, 2007 | 3:40PM

humm. A deep pocketed competitor and one with guts. There is only one company with a deep pocket, but they do not have the guts to rewrite the history of telecom history, but Maybe Google maybe Google can do something about our broadband problem.

Terry | Aug 03, 2007 | 3:53PM

Hmm... so I should be happy with the status quo, and pay $99.98 per month for decent static ip access?

The climate within the regulatory agencies, as well as the lead from the executive branch seems to be very carpet-bagger in tone.

First, outsource all your intellectual property; Second, don't invest in your own infrastructure; Third, get *yours* while you still can and go off and adventure (burn capital like crazy).

Sounds distinctly American.

I'm depressed. Bob, we need to think-tank a solutions (as previously stated, you're good at those!) ; unless Google (in g we trust?)... picks up the tab.
-e

Aedmunde | Aug 03, 2007 | 3:55PM

Canada also has parallel cable and telco delivery of internet services and these are similar to the US pseudo-monopolies. There's also satellite. So isn't the slowing down of broadband advances simply a reflection of the established network infrastructure - akin to the higher adoption of cell phones in developing countries since being later to the game allowed them to avoid the increased cost of landline infrastructure?

One thing is clear, if europe had been the launch point for the iPhone, it would be 3G. You can only get away with 3-5 year old technology in North America (be it cars, appliances, cell phones...).

Jim | Aug 03, 2007 | 4:12PM

I think Bush is the greatest President of USA ever to people in Asian countries like China. In Bush's first year as President, Dick-Rumsfield et al tried to drum up resentment against China (remember the spy-plane mid-air collision?) Thanks goodness instead they picked a war in Iraq. I was so convinced back in 2000 that there would be a war between US and China over Taiwan. If such a war broke, we will have no cheap mobo or iphone for a very long time :-)

As someone has said, "a people deserves their government". It is American's choice of war over other things. (Referring to 2004 election)

So, please, this 2008, pick a bright guy or woman, for the sake of world peace and technical advancement.

Fuji-clan | Aug 03, 2007 | 4:25PM

I respectfully disagree with tanroof.

The degree to which the average citizen has access to the internet directly affects his or her ability to gather and assimilate information in an increasingly competitively world. If we're to hold our lead in personal productivity (which is the only advantage we have over other nations at present), cheap, high speed internet is a matter of national concern. it's the nervous system of our country and the world. In a country dominated by service industries, everything is data except food, maintenance, and personal care. Moving bits over the wire is key to our dominate position in the world economy.

How much is enough? As a friend of mine used to say: "Too much, is not enough." Free people will always find ways to fill the bandwidth and the next "big thing" will come from an unexpected place. It wasn't a mega-corp that dreamed up You Tube or Google. Voice, data, video, teleconferencing, interactive multimedia, distributed software applications, the list is only limited by our creativity.

If we as citizens don't "get out in front" of this thing and demand our legislators pay attention to this pressing issue, we will surely lose our place as the tech leader of the world.

I'm not sure what the answer is, but at least an independent committee should formed (maybe headed by Bob) to study how best to get the widest possible pipe into every home, as quickly as possible and what the government can do, or not do, to make this happen in the private sector.

skip Beighey | Aug 03, 2007 | 4:40PM

not that we will but I understand we currently spend 12 BILLION dollars a month on the war. Perhaps for six months we might spend this money on fixing this issue.

Say what you want. The money figures are real. The money comes from our taxes.

bout time to outsource myself.
:-)

Ted Potter | Aug 03, 2007 | 4:46PM

Bob, you are Right On The Money. A fine and well-researched article, but ...

WATCH OUT: Cheney-Bush and the neo-facist corporate brotherhood will Get You if you ever say that America is not the best everything yummy yummy wave-the-flag !

William Donelson | Aug 03, 2007 | 4:55PM

US will likely never take the lead again - namely due to the incompetencies of the various ISPs, but also due to the landmass and our demand that all users have equal access - i.e. Midwesterner Joe Shmoe in the middle of nowhere will have the same access as the folks in downtown Manhattan.



Sure Canada, China, Russia, and India are all on equal landmass scales; but only really Canada is on equal telecoms scale with the US. The others centralize more around the big cities, and if you're not there you're out of luck.



At least one US State (PA) has tried to upgrade all its infrastructure from copper to fibre - only to have the baby Bell use the money for something else and want more money to complete the job (which would likely get spent on something else yet again), and then have to fight it in Court to get the work done. (I'm not sure what happened to the court case, but it is likely still on-going.)



So no, the US States don't have enough power to do it, and the telco's and Cable companies aren't going to do it. May be Google was trying to do it with the 700mhz spectrum....who knows...but it'll certainly be a long time before the US will see that kind of bandwidth.

TemporalBeing | Aug 03, 2007 | 5:12PM

Did it escape all parts of this analysis that the US is unique in the fact that the telephone system is not controlled by the governmental PTT (Postal Telephone / Telegraph) entity?


Perhaps a lot of our pain was due to the disintegration of the telephone company in the early 80s into little pieces. Market forces have since conspired to put them back together again.


Then again, large corporate entities aren't likely to invest in new infrastructure without a clear path to gain a return on their investment. Government PTTs, however, can dip into the public till and spend without such regard.

If the infrastructure wasn't already in place by NTT, how would SoftBank have poured out so much access in Japan?

Bill Coleman | Aug 03, 2007 | 5:13PM

Hi Bob,
You have been researching under the wrong rocks.
I am able to tell you, again (I told you last year, that there is a corporation that is about to open as a publicly traded company, who will provide "the ability to broadcast the Internet connection signal via repeater towers from one central NOC (Network Operations Center), broadcast to distances of 30-miles without degradation of the signal, transmit through buildings, forests, and up to 20 feet underground, maintain a T-1 connection both UP and DOWN without degradation from the amount of simultaneous users connecting, and having managed to secure the signal with 256-bit SSL encryption where no firewall hardware is required, we believe this WiFi Corp. will quickly become one of the fastest growing Corporations in the history of the Internet, and quite literally, will be able to make the statement;
"There are two types of people in the world...
Those who are connected to the Internet through our network...
And those who have still yet to connect to the Internet for the very first time""
Here comes your WebTV... finally!

Jean-Luc Giraud | Aug 03, 2007 | 6:03PM


Good article, Bob, but I do have to ask about your comment that "three slingboxes can take down an EVDO cell."

Is this literally true? Or did you take a bit of (ahem) poetic license? That said, I don't argue with your overall point. Anyone able to say if this slingbox example is actually true?

Pete Lockhart | Aug 03, 2007 | 6:06PM

Bob, you once again take a complicated story and simplify it without providing a single reference to your "facts".

I think it may be time to drop off your email list.

Nick

nick b | Aug 03, 2007 | 6:30PM

I live in the boonies and the only option for broadband in my neighborhood is satellite. Some small areas of my county are covered by DSL, cable, WiFi, and cellular services -- every time a new service is announced, it duplicates the existing services rather than expanding the service area.

Joe in MD | Aug 03, 2007 | 6:39PM

"It is still useful in the bigger scheme of things to have the diversity of the US economy where telco and cable both have connections to the home as opposed to everywhere else where there is only one."

I understand very little technical stuff, but I do know that wires from British Telecom (telco) and Virgin Media (cable) come into our house, as they do for millions of other folk here in the UK. Both offer broadband internet access, so there is real choice and competition, especially as BT have by law to act as carrier to other providers.

Bob Doney | Aug 03, 2007 | 6:43PM

Washed out roads, spotty electrical service, unreliable telephone service and, slow postal service dramatically effect efficiency in any economy. This limiting of efficiency holds at all levels: the individual worker, a single business, an industry or a nation-state. In today's marketplace, digital information networks are just as important as any of the other infrastructure networks listed above. In fact, one could argue that digital information networks are more important than any one of the others because of their ability to compensate for failure.

This failure compensation is not limited to the digital networks themselves, but extends to other networks as well. Information about a failure in one network can facilitate rerouting information, people and other resources around the problem. This information may also facilitate more rapid repair of the effected network, thus enhancing efficiency.

In a global economy, every nation-state must compete with other nation-states for finite resources. Likewise, all workers in one nation-state must compete with others throughout the world. The same holds true for the infrastructures that those workers use. A nation that neglects it's infrastructure, allowing the quality of service to fall below that of other nation-states, is directly limiting the efficiently of its workers, and by extension,its economy as a whole.

Troy | Aug 03, 2007 | 6:53PM

As an early adopter of FTTH here in Tokyo several years ago, I find your emphasis on the role of Softbank a bit oversimplified. USEN Broad, for example, was offering FTTH long before Softbank; and NTT, the current leader, was also installing fiber all over the country from early on. Their pricing was comparably low. (I chose USEN originally, then NTT the next time I moved to a new house.) It's a highly competitive market with many players, but Softbank is only one of those players, not the main driving force.

A big factor was that all these players saw the content market to be their biggest chance for profit, so they were rushing to get the infrastructure in place.

Wataru Tenga | Aug 03, 2007 | 7:55PM

WTF? I thought Google's armada of magic boxes were going to save us all. That's what Cringely was telling us last year. Oh doom!

EJ | Aug 03, 2007 | 8:07PM

Sorry, but this is complete nonsense. Telecommunications in the U.S. is inefficient because there are (at least) two competing technical infrastructures? Do you think the microprocessor industry would be more efficient if Intel and AMD merged? What about operating systems if Microsoft and Apple merged? Economies of scale are just one element of efficiency, and far from the most important one. Much more important is innovation, which is spurred by competition, not economie of scale.

In any event it turns out that the U.S. is NOT lagging in broadband, contrary to the flawed study the OECD recently put out. FCC Commissioner Robert McDowell debunked the study in a Wall St. Journal op-ed piece entitled "Broadband Baloney," a couple of weeks ago. Rather than quote excerpts here, I'll just post a link, and you can all go read it for yourself:

http://www.freepress.net/news/24838

Michael Ellis | Aug 03, 2007 | 9:59PM

M. Ellis writes, "Robert McDowell debunked the study".

Not entirely by any means. According to Ars Technica, http://preview.tinyurl.com/27e9as, in a more recent speech, FCC Commissioner Michael Copps, "didn't mention McDowell by name, but he did claim that broadband in the US is 'so poor that every citizen in the country ought to be outraged.' Back when then OECD said that we were number four in the world, he said, no one objected to its methodology. Copps also had fighting words for those who blame the US broadband problems on our less-dense population; Canada, Norway, and Sweden are ranked above us, but all are less dense than the US. Besides, this argument implies that broadband is absolutely super within American urban areas. Copps noted, though, that his own broadband connection in Washington, DC was "nothing compared to Seoul."

Stephen Ronan | Aug 03, 2007 | 11:04PM

Interesting discussion on ./ here:
http://it.slashdot.org/article.pl?sid=07/08/03/1945220

Nico Morrison | Aug 03, 2007 | 11:49PM

I disagree. Canada is ahead of the US in the list, but also has multiple telcos. Cable internet is also quite popular in Canada. So, we've got multiple telcos and a split infrastructure like the US, but we're still ahead in the list!

And, you can say WiMax is useless all you want, Bell Canada offers 3mbit WiMax service in major cities for quite a reasonable price; obviously they've figured out how to offer it at decent speeds while making a profit. Sure, it doesn't compare to the ADSL (5mbit) or ADSL2+ (24mbit, but you'll probably get less), fibre (16mbit), or cable internet (20mbit) services available in Montreal, but at least it's there as a choice. Bell also has another 3mbit wireless service that uses 3G technology, if I'm not mistaken.

Adam Zey | Aug 04, 2007 | 1:21AM

Well, what I see about the Internet is that it is exactly like using a green screen terminal hooked up to a mainframe circa the mid-1980's or earlier.

In other words, you click on a link - and then you wait. You wait for somebody's oversubscribed, underpowered server to fire up and send its data over an oversubscribed, inadequate bandwidth.

So you sit and wait five seconds to a minute or more for a Web page to load and render. In the old days, mainframe application designers aimed for four seconds or less response time.

And this is why the Internet is a mess. Absolutely zero responsiveness.

How many times have Web designers - and presumably ISPs - been told that if a Web page takes longer than four seconds to load, people bail?

And we're supposed to run mission critical apps over this disaster? Web 2.0? How about Web 30? That's what's needed here.

But it won't happen because management - all management - as usual - wants to do everything with nothing, so we end up with nothing in everything.

Meanwhile, the usual suspects chime in with "Well, it's good enough - nobody is demanding more". Really? What happened to "build it and they will come"? The dot bomb? Was that all it took to erase logic from the equation?

Even now, we're starting to hear that "Web 2.0 is another dot bomb."

Gee, I wonder why.

Could it be because we have no infrastructure to support any further advances in computer science and networking because everybody is locked in to 1.5mbit DSL and Microsoft Windows?

Richard Steven Hack | Aug 04, 2007 | 6:47AM

I visit the US regularly and am always amazed at how you have gone backwards in relation to the rest of the world.

I used to eagerly anticipate a visit because my hotel room would have a faster connection than my home.

Now I dread connections in the US and try and find ways to avoid it.

Almost staionary connections from hotels and just about the worst cell service in the world!

With my Treo750 and 3G+ I have fast email access at home, I can quickly load up IE and seek information.

I nearly died laughing when I read that the Iphone didn't have 3G!

As for page load speeds, well design your sites so that slow connections can use them, toss all the glossy trinkets and go for information.

Geoff Boyle | Aug 04, 2007 | 8:02AM

No, it's not good enough and we are demanding more. No only is it not fast enough for youtube and videos, how about really important apps like telemedicine, real time education and study groups, and e-commerce. Its time to wake up our representatives and demand accountability. It's a joke to have to pay as mcuh as we do for so little in return. WiFi isn't the answere unless all you want to do is get your email we need fttp for real speed and reliability. Go to the Speedmatters website www.speedmatters.org, test your speed and use the link to tell Congress how you feel.

seaowl | Aug 04, 2007 | 9:57AM

I don't think the problems facing the US telecom infrastructure have anything to do with physical problems, or political games, although they are a contributer. The real problem, as I see it, is a total lack of imagination by the marketing departments of these companies. They are so caught up in giving the customer what they want (or at least 70% of them), they don't take any time to think of what might happen if they really opened up the pipes for a real cheap price. Granted, the minute an ISP does this, it will be protested at the highest levels of government for anti-trust behavior, but there's no reason the competition couldn't do the same thing.

The other problem is that direct competition is not happening. You have two choices, Coke and Pepsi, and neither one is all that great.

And what about all that dark fiber laid in the '90s? Sure, much of it runs in the same places (the Boston-Washington DC corridor has more than anywhere), but out west any town with a rail line has at least one cable going through it (remember Quest was started by the guy who used to be CEO of Northern Pacific RR, but he kept the right of way), but much of it is controlled by the telcos, and they won't sell you a dark fiber, only a provisioned circuit, usually ATM or SONET, not just plain old 10Gig Ethernet, and it comes with a lot of strings attached.

ready kilowatt | Aug 04, 2007 | 10:24AM

You almost got it right when you pointed out other countries use one telco infrastructure to deliver service, but then you lost it.

You should explore the 1984 consent decree that broke up AT&T. All these problems stem from that. That was the only time to get this thing going in the right direction. Instead of taking a physical network and ripping it apart to create two isolated, new ones (local and LD) at the cost of hundreds of billions of dollars, the network layer should have been separated from the services that ran across it. We're not maintaining two infrastructures, we're maintaining four. Each cable and telco has a network to maintain that no one wants to pay for and has to figure out how to subsidize it by selling the services that run across it.

If we had broken the original AT&T up into a network operator and a service provider, then the network operator would have very strong incentives to spur competition (CLECs) because the more service providers there are, the more money they'd make providing the infrastructure to deliver those services. Not to mention that competition among service providers pushes new product development to differentiate those providers. In hindsight, I can understand the telco's fighting it tooth and nail, but it was quite likely the ONLY time in history that they would have had the ability to destroy cable TV with a more efficient structure and still maintain at least part of their monopoly in regards to the network operator standpoint.

The entire reason that companies like Williams, Qwest (original incarnation, prior to eating a baby bell), Broadwing, Level3, etc can exist today is because there is a need for a network operator of such scale and scope. Had the consent decree been done right, there'd be one national infrastructure and a hundred service providers fighting to deliver services to your doorstep over it.

joe | Aug 04, 2007 | 10:38AM

Is everyone really so cheap?

If you need it to earn your living, $100/month is not too much for a static IP.

And you should have at least one backup (e,g, DSL or cellular if you primarily use cable) if you need broadband to operate your business.

This is like reading VOIP forums where you find people who ran ALL their business lines on Sunrocket!

Bill | Aug 04, 2007 | 2:32PM

Bill, you miss the whole point. The US is no longer a leader in broadband.
It doesn't matter how much it costs or is worth to a company or individual, it means the US is on the slippery downside of the slope. The rest of the world is bypassing it. US companies will move their operations overseas were things are cheaper or better. More US technical jobs will move outside. Non-US consumers will be receiving better service and services impossible to obtain in the US.
Although it isn't there yet, and inertia will keep it going for a while longer, the US and it's citizens are in danger of becoming a second class country in the information age.
This not about quibbling whether an appropriate cost for 100MB service is $10 or $100, this is about what has happened to the vaunted US leadership in bandwidth. And what this means for the US economy in the longer term.

denis | Aug 04, 2007 | 4:36PM

Cringely, it sounds to me like your making a big deal about nothing. It doesn't really matter if some other countries have faster internet connections. It only matters that ours is fast enough. Before you can claim there is a problem you have to tell us what our internet connection speeds don't allow us to do. And our economy will not tank because we get 'video on demand' or telepresence, three years behind everyone else. Why is it because I can't pull down a web-site in .01 seconds instead of .1 seconds this is going to kill my standard of living. Yes there are some people that need faster internet connection speeds. But why does it matter if I don't get these speeds right now instead of a little later? Things could have been better but things can always be better.

C. Miller | Aug 04, 2007 | 9:45PM

Our Internet access is neither fast or cheap enough. Until you have used the Internet in one of these countries and used what is available there, you have no clue. I want by 100 mbps please. I want it down and up. Rome denied it too.

Mike | Aug 05, 2007 | 12:31AM

Part of the problem is the fact that most ISP's do not have enough volume to give their customers competitive prices, or have to enforce draconian bandwidth usage limitations. I live in a major town out west, with lots of high tech industries, and proximity to the Rocky Mountain Backbone. There are a dozen ISP's that would be happy to have my business for about $30 a month. But there are only two real choices - Qwest, for DSL, or Comcast for Cable Modem service. These are the only real choices, because they own the copper. My hope for a higher speed future is for high speed wireless to come to town, but someone is going to have to invest in the infrastructure.

Randolph | Aug 05, 2007 | 11:15AM

I am one of the fortunate US consumers that have fiber internet and phone (Paying $90 for 50mbps down) and while I see 100mbps as a nice upgrade you have to ask yourself something. I notice different web sites and services still have fluctuating speeds. Last night I tried to stream some video and was getting choppy connections. I first thought that it was my problem, but through experience I know that the provider of the services just can't keep up. The cost involved to build infrastructure is not an issue, it's how to monetize it which is key. I believe advertising will have some part of it, and I can see broadband speeds going up without a doubt. You see right now the fastest sites are hosted by Universities who have souped up their infrastructure. Now if we can only get those video sites, music sites and iptv services profitable we'll see a demand for more bandwidth both from the business sector and the consumer sector which only uses really what it needs. The reason YouTube is so popular is because it's small video clips. If you want to stream a HD video on the net good luck, even if you have that 100mbps connection you'll have to make sure the HD video site can keep up with the demand. We're talking about millions of dollars in databases, servers and multiple OC3's to support just a few users.

steve | Aug 05, 2007 | 11:20AM

Bill,
How much does population density play into this? I would always expect to have to pay a bit more for my ISP's service here in Canada than I would say in Japan since their density is so much higher. That goes for Europe as well. Different services are added on as gravy and again, can only be given a good price if the density is there to make the ISP's roll out worthwhile.

I'm not sure about this but isn't the U.S.A very much a rural population and if it is, does that not mean they they have this same problem?

John | Aug 05, 2007 | 11:30AM

In Brussels the typical bandwidth for home service is now a 6 mb link. I moved to Europe in 1992 to work on building backbone networks in Central Europe. I was one of the many engineers that was on the standard groups that developed the communication protocols that make the internet possible. At the end of 1988, the NBS (NIST) and the CCITT (ITU) released the new ISO protocol stacks , X400, X500, 8859, and many others that make communication and the internet possible.

Since then, the engineering jobs have dried up in America and the pay range is so that of used car salesmen. The salaries for qualified people are less now than in 1985.

Where are you going to get the qualified people to develop the new generation of services? I certainly will not go back and earn half of what I can earn in Europe.

marshall cupp | Aug 05, 2007 | 1:15PM

Wish I had more tech savvy. We are so badly educated to be consumers in this dayn'age. All I know is my DSL speed has a 3 in front of it & is not yet fast enough for real streaming video, but then i see where people say its the provider sites stoopid. Well technical advances and demand WILL take care of that. And why has the telco been blocking intersections installing fiber in my community if there is no upward pressure? No doubt the US has been/is losing its competitive edge in many ways, that is a natural process as we move toward a more equal world. But I do not believe we are stuck forever with no better broadband future in sight.

dean | Aug 05, 2007 | 1:27PM

Japan is 150-megabit-per-second for less than $10.
Tokyo will be completely digital and wireless by 2010 and it will be completely free anywhere within the Tokyo Metropolitan area (37 million people).

By the way, you missed Iceland & India which both can deliver over 100-megabit-per-second right now too. So the rural question is missing the point.

Havoc TV in Japan can deliver HDTV full screen, digital quality video with no buffering, no downloads, and no streaming right now here in Japan, while you guys have to deal with Youtube.

America's infrastructure is much like that bridge in Minnesota

mike rogers | Aug 05, 2007 | 3:51PM

“How do you like them apples” or The Great British Phone Con

Will: Do you like apples?
Clark: Yeah.
Will: Well, I got her number. How do you like them apples?

Source: Film: “Good Will Hunting”, dialogue between protagonist Hunting and some anonymous Harvard undergraduate plagiarist.

With the advent of cheap, ubiquitous broadband, I am beginning to wonder when will the atrocious example of con artistry / cartel (known as per minute billed voice calls) finally be exposed? Why is it that we pay about 50 times more per second per bit per second for voice than we do for data although we are getting data at much higher information quality rate than voice; about 200 times more. So why is that?

A colleague once told me that his father used to sell apples on the family fruit stall. At the start of each day he would take a pallet of 40 apples and divide them, completely arbitrarily, into 2 sections - premium and normal. He would charge perhaps 5 pence for the “normal” apples (hey this was like the 1960s or something, ok) and 15 pence for the “premium” apples.
Not surprisingly, the premium apples always sold out first. “Those saps in the 1960s!”, you may rightly be thinking. What fools they were to fall for such a con.
Now apples are apples and we all know what apples are so hopefully no one is going to pull the wool over our eyes when it comes to one of the best-known fruits.

"Voice" is actually 11,000 times more expensive than data. On the same line.

Here is the scary bit:
· There is NO difference between voice and data on digital exchanges.
· Almost all exchanges in Britain are digital.
· Only a tiny fraction of exchanges in Britain are analogue.

If you were browsing the Internet, would you expect to pay more money to download a page from Brazil than you would one from Bognor Regis? Of course not. You pay a flat rate and you can surf anywhere in the world anytime.

So why do we persist in charging different rates for calling different countries when they are all actually equally easy to get to?

Why? Habit. We are stuck in our ways and we apply an erroneous rationale to information costs by equating it with sending something physically.
Imagine if a radio charged its users more money the further they got away from each other!

How have the phone companies (company) gotten away with this for so long?

Voice over IP (VoIP).
Quite simply, this changes your voice into digital bits and transmits it over the Internet to another location where it is reassembled into voice again. Predictably, it can be done for a fraction of the cost of the so-called “voice” circuits. It bypasses telephone cartels which try to ramp up the cost of calls to fleece the unsuspecting “premium apple”-buying public,

Based on the bandwidth, one could have over two hundred “4,800bps voice” phone lines on a 1Mbps line for 1/50th of the cost.

Cloud Framework - A new reward paradigm
In the current environment, there is no incentive for the individual broadband companies to invest in anything but the bare minimum infrastructure they can get away with. This leads to a continual degradation of the country's network backbone for the general public, causing most people to receive a mediocre service. With a slightly different framework, we could have a much more robust and high capacity system for the public at large, creating a virtuous circle of continual improvements in broadband speed and quality and thus higher user revenues. This would also make the country more competitive and allow us to compete with countries where the central government makes a strategic decision to invest in high speed broadband.

Compare this strange situation with the deregulated electricity market where one can buy electricity from any generator in the market by using the wonderful virtual market for electricity. When one does this, one does not need a chap to come around and reinstall one’s electricity meter from “RedPower” and then leave one's abode without power for 2 weeks before installing a meter from“BluePower”. But unfortunately this happens with broadband, thereby creating a false impediment to market choice for the consumer.

Instead, every broadband provider should be required to contribute money and expertise to a fund in order to keep a set of exchanges in a city area up and running. Any profits the providers make are reduced by the ratio of uptime of the exchanges in the cities, so if the exchanges do not meet a prescribed service level agreement (SLA). If the exchanges are down a certain amount of time, then the providers (ALL of them) will not make any profit in that area.

Just like the National Grid distribution system, if a customer wants to move provider, this can be done in 5 – 10 minutes through an online form. This will force broadband providers to invest in high quality customer service and offer better perks to customers, thus enabling the broadband economy. Innovations such as no fixed term contracts will follow without need for the Government to dictate terms to any company.

This framework will also guarantee a minimum amount of technological innovation per year, before our national infrastructure crumbles. It has already been done for the hard market of electricity generation and distribution so why not for broadband?

Any company should be free to build its own private exchanges as well, but the cost of getting a licence to operate a broadband service in the UK will be a contribution to the infrastructure fund every year. Every city must have a robust cluster of up-to-date digital hubs which keeps each community connected. The actual equipment over which the data will travel will be a collection of equipment provided by each vendor to provide heterogeneity to the network (a key design aspect in survivability considerations).

Thus a simple change in a “routing table” (a configuration setting in the machinery of the broadband apparatus) at the exchange will allow a customer to change provider within 5 – 10 minutes. This will change the dynamics of the market, rewarding the most innovative, customer-focused and pro-active providers and causing the elimination of all others.

This can be implemented very easily and cause an immediate increase in the choice and quality of services without costing the taxpayer any extra money.

Mobile Phones
Now here is the real humdinger. The same is true for mobiles phones.
With the new technologies of GPRS / UMTS / 3G, we can put through at least 10 times the necessary bandwidth for voice data ALL the time over a mobile almost anywhere in Europe. This means that your mobile phone could make and receive voice calls for about 0.00001p per minute or less. Not the 50p per minute we pay currently.

So why do we pay more for mobile calls? It can only be because of a monopoly on access to the networks.

Reduced phone costs will trigger more business opportunities. Just like lowering interest rates. The Government needs to act to promote true competition and open up all areas of our telephony network to real competition.

So to conclude, it seems we are all saps. It seems as if Auntie BT is quite successfully fleecing us per second.

Someone better get her number.

And no, we definitely don’t like “them apples”.

L-V-M Admirer | Aug 05, 2007 | 5:23PM

Maybe you could ask your friend to pass along the details of this $10 fiber service because my basic fiber connection costs over $55 a month, and I haven't seen anything dramatically cheaper in Tokyo. While it's true that some new apartment buildings or condos offer free or nearly free internet access, acquiring fiber generally involves going through one of the country's many service providers, which in turn goes to NTT for all of the real heavy lifting. DSL, which is no slouch either, is still cheaper than fiber, but NTT is pushing fiber pretty hard, waiving constructions fees and offering a variety of promotions. That being said, fiber to the home is widely available in Japan and still much cheaper than comparable services in America, so the point of your article remains true.

sennuwy | Aug 05, 2007 | 6:05PM

Two quotes culled from earlier comments:

My hope for a higher speed future is for high speed wireless to come to town, but someone is going to have to invest in the infrastructure.

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

If you want to stream a HD video on the net good luck, even if you have that 100mbps connection you'll have to make sure the HD video site can keep up with the demand. We're talking about millions of dollars in databases, servers and multiple OC3's to support just a few users.

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

What if a 1/4 or so of the many, many billions spent on military adventurism in Iraq and on our supposed rebuilding of "infrastructure" over there had been allocated instead to net communications infrastructure over here -- for end users and servers and everywhere in between. We'd now have, in process, a much improved national surfing experience (not so much for the wave boarders in Monterey Bay, but certainly true for track pad riders in Laramie!). It seem that when the federal government really wants to spend a whole lot of money on something, regardless of the social costs, it manages to find it somehow, somewhere. Iraq isn't the only example of this. It's really a matter of setting social priorities, and just how those decisions happen to get made. Having a coherent public policy helps, too.

We could, of course, do the same kind of reallocation, but at a higher level, to provide universal health care for all, too. Or, at the very least, provide health cost coverage for the poor and the under/uninsured. Not that any other country has ever tried this.

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

As far as extending high-speed coverage to remote areas is concerned, it sounds rather similar to the conundrum faced around a century ago by U.S. rural dwellers who expressed frustration over a lack of access to nouveau urban luxuries such as electricity and telephone service. Especially in the upper Midwest, a prominent early solution was the establishment of rural cooperatives to provision what Ma Bell and Edison would not. The big boys were equally unwilling back then to spend money on sending wire out to remote places. Instead, the locals organized themselves. Sometimes there was outside assistance, but by and large they reached into their own pockets and gave a modest amount each for one share and one vote toward the creation of their own regional utility.

Today, solutions to speed up net service might mix these approaches. Units of government could provide public funds to independent, not-for-profit local entities that then set up wireless networks that cover a given area. In return for getting these funds and other special support, the service providers accept public interest regulation that calls for, among other things, a free or very low-cost basic service at a reasonable speed (not dial-up x 2!) available to everyone in the area who has a wireless card.

Where I live, the county gave a go-ahead to an privately-run wireless project intended to cover every square mile with a free, low-speed service. A high-speed version will cost around $35/month; right now out-county areas often have no dsl or cable option. Since the county's support includes little funding, the project has stumbled somewhat as it seeks adequate financing from private sources. Meanwhile, city recycling has run more or less as a public-private partnership for quite some time. Our successful, nonprofit recycling "utility" began over 25 years ago as a volunteer project at a time when almost no one thought that the diversion (from the waste stream) and reuse of paper products or glass could possibly pay for itself. Those volunteers simply felt that it was something that had to get done and would do it themselves if nobody else would.

hairless but not wireless | Aug 05, 2007 | 7:06PM

>America was the top broadband country in the world


Americans like to think they're the best at many things, but I'd like to see stats proving the above statement to be true.

Rico Suave | Aug 05, 2007 | 9:43PM

Bob, you are all caught up in "Public Utility Theory nonsense." That is so 20th century; there are no "natural monopolies." Public Utilities, power and phone systems, can and do compete with each other as is proven in some small towns in Texas. Those towns have twenty percent lower rates for electricity than where there is no competition.

The only successful monopolies are where the government enforces them by running competitors out of business. The phone system have been a monopoly since the 1920's and still is. The "Local Bells" have a monopoly on the landline's in a territory. They have leveraged that into a monopoly on the mobile phones. The Local Bell monopolies are gobbling each other up in an attempt to re-constitute "Ma Bell" AT&T.

The solution is not to enforce any monopoly, but to let the market decide. When there is plenty of competition the ISP's will differentiate between themselves by delivering better service and lowering costs. But, some areas will always be more expensive than others because of low population densities, rough terrain and geographical isolation.

This issue of "efficiency" is bogus. If you allow things to become too efficient by suppressing competition then you get Point Failures. That could come from a Public Utility getting complacent and incompetent, so that they no longer feel the need to serve their customers. Or it could be that "Point Failures" are a good places for terrorists to hit.

Witness what happened in Estonia.

http://www.informationweek.com/security/showArticle.jhtml;jsessionid=WLWSO4DHHQFUYQSNDLPCKHSCJUNN2JVN?articleID=201202784

If there had been competing ISP's in Estonia then the whole system couldn't been shut down.

Efficiency is fine in a perfect world; it can lead to lower costs. But, we don't live in a perfect world. We need redundancy. We need competition to keep the Communication providers from getting complacent. We need to let the market work. We need to get the government out of this business.

Louis Wheeler | Aug 05, 2007 | 10:12PM

My read on the roll out of the Internet to America back in 1997 was that the media giant expected families would pay for subscriptions for content from say the Disney site, for the Economist magazine, etc. What developed instead was a lot of free content from parties simply putting written material onto web pages. At this point, most of the corporate interests in the US lost interest in the Internet as a media channel.
Developments such as Napster and DiVx (the origin of MP3 encoding) made the download of MP3s possible which attacked the CD/ physical media underpinnings of the music/ movie industry, content sold as physical media (shiny disks). This downloading would have been even more prevalent with more broadband.
Given that there is no comparative media industry among the front runners of broadband, its no surprise that those countries are many steps ahead of the USA.
Microsoft has also been a lukewarm Internet adopter. The Internet makes the Microsoft Windows desktop more and more irrelevant. Example: for Microsoft Encarta sales have been lost to Wikipedia. There has been foot dragging from tech providers as well in the US. American On-line was another foot dragger.
It is possible for the US to catch up and surpass. This technology will likely be some form of wireless broadband or broadband via electrical wall plugs which is available in Canada.

David - Canada | Aug 06, 2007 | 2:06AM

re:
>>>in Japan, a country even more corrupt than the
>>>U.S.

Japan is the most egalitarian industrialized nation in the world (it is even more egalitarian than Sweden). Poverty is very rare and everyone is covered by universal health-care. (By contrast, one in five U.S. children lives in poverty).

The U.S.-style CEO who lays off thousands of workers even as he pockets hundreds of millions of dollars is unknown in Japan.

Indeed, while U.S. CEOs make on average 700 times what the rank and file worker earns, in Japan this multiple is a mere 20 (although, interestingly enough, Japanese workers earn higher average wages than U.S. workers these days---and contrary to the outdated stereotypes, Japanese workers get more holiday time these days than Americans).

Japan may not be a utopia (no nation is). But its people have the longest average life expectancy of any major nation.

If this is a "corrupt" nation, all I can say is: can we in America please have some of this corruption?

Marc McDonald | Aug 06, 2007 | 2:24AM

Bill Coleman, the US is not unique in not controlling the network. In the UK the network was originally government run but back in the 80s it privatised the network. BT now owns and runs the network and is a private company that isn't able to just grab public money on a whim. I'm sure there are probably other countries with a similar set up as well.

Liam | Aug 06, 2007 | 9:26AM

I just came back from Italy. If I had brought my laptop I could have used it just about anywhere.

mparker | Aug 06, 2007 | 12:41PM

Reading this column for the last 10 years now and with the user comments added to it lately, just affirms my belief that this column has some of the smartest readers in the Internet. Some of the comments are as good as the articles.

I now look forward to the comments as much as the weekly column.

Roby D | Aug 06, 2007 | 12:52PM

>>>in Japan, a country even more corrupt than the U.S.

Corrupt is the wrong word here. Business dealings are based on differing priorities - relationships and loyalty play a large part. So naturally, sometimes these loyalties trump the good of the people. But I wouldn't call it corruption, which I associate more with Tyco execs, Enron dealings, etc.

Brian | Aug 06, 2007 | 5:16PM

Maybe there's an inherent paradox in US consumer mentality. We hate monopolies, yet we continue to use the services of AT&T. As it happens, the areas of our lives with the least amount of improvement cost us the most, and we continue to defend them with lame excuses like the geographical scales and investment needs. Yes we have a scale problem due to population density, but that didn't stop the cable TV installation vans.

South Korea and Taiwan had cheaper and better connections even before the dot bomb in US. People who couldn't afford ADSLs at home went to internet cafe, and almost every high school and college had a bunch of i-cafes nearby. Everybody knew there was pr0n and gambling and teen-chat forums, but the governments were no nanny states.
Once again that's a paradox for US. We are actually proud to be a nanny state, despite the freedom we extol.

Sciolus | Aug 06, 2007 | 6:24PM

If the Jap and Euro ISPs are so good, why don't they invest in the States? They probably have enough cash now for the capital to start laying down cables. If they're have as efficient as Cringley says, consumers will flock to them in droves. Right?

Ephilei | Aug 06, 2007 | 8:16PM

"By the way, you missed Iceland & India which both can deliver over 100-megabit-per-second right now too. So the rural question is missing the point."

If you mean that end users get 100mb for Iceland, then thats wrong.

Current end user internet plans are DSL and cap at 12-14 megabits (depends on ISP) and are not going towards the fibre solution for another few years.

I know this since i work at an Icelandic ISP.

To get a 12Mbit connection in Iceland, you have to pay 103$ a month. (thats concidered cheap here, id be willing to pay upto 130$ a month for 12Mbits)

Ólafur | Aug 07, 2007 | 6:02AM

The game may not be over. When technology becomes cheaper deployment will skyrocket. I believe Google will be the catalyst and here is why.

1) Mobile users are will be the driver of Google's future growth.

2) Google has billions in the bank and a hefty stock price.

3) Google is owner of a huge amount of dark fiber and a few things called datacenters.

4) New technology such as FemtoCell can upset the economics of broadband. See BusinessWeek.
http://www.businessweek.com/technology/content/jul2007/tc20070730_802787.htm


Look out wireless carrier it is just a matter of time before the all the consolidation of the last decade comes falling down like a house of cards and opens a new era of Broadband.

No the game isn't over!

Terry | Aug 07, 2007 | 10:58AM

It will be hard to regain our lofty position for several reasons.
1. We, like sheep accept what out current access providers parse out to us and say that is all you need.
2. Out major access providers have got to stop investing in more copper and focus on fiber.
3. The providers must develop a method to get true fiber based broadband in to rural America where 60% of us live.
4. Government must begin to accept th fact that a broadband infrastucture is as vital as a concret and asphalt one. Perhaps even more so as fuel cost rise and travel continues to drop off.
5. We must speedup the adoption of IPv6 as our foreign neihbors have.

We can regain our position.

Jerry | Aug 07, 2007 | 2:30PM

...entry of a deep-pocketed competitor with a death wish like SoftBank

Weren't you saying last week that Google's announcement of its plans to bid for the 700 MHz spectrum seems to be a suicidal gesture given the clout of the telcos? What if they DO plan to start a bandwidth war in the wireless space?

Bruce | Aug 07, 2007 | 3:13PM

I'm an American living in Switzerland and currently have 5mb DSL service (thru Sunrise, they just doubled it for free last year). Cost is somewhere around 50 dollars a month. I'm way oversubscribed. Since I can't legally download music or videos, I'm pretty sure that I could make do with 1mb or less and be a very happy surfer. My mother in the States recently asked me if she should get DSL instead of dialup, and I told her probably not.

brett | Aug 08, 2007 | 3:11AM

Off-topic here, but with the new Apple iMacs out, I wonder if one of Bob's previous predictions will be true. He mentioned the new iMacs would have a hardware H.264 codec. Maybe this will be addressed soon.
aaplhead
PS... Those new iMacs look terrific!

aaplhead | Aug 08, 2007 | 11:09AM

I remember seeing that report, and small and dense location have higher connectons. That shouldn't be surprising since you can get more customers per distance of infrastructure. Trouble with the high billing costs of utilities is they don't have to be efficent having so little competition.

Reselling lines ain't competition. It's the same troublesome lines regardless of the reseller. Mobile phone providers actually compete becuase there's a choice of TDMA, CDMA, and GSM. WiFi and WiMax are two more choices. So the US has seven choices of internet infrastructures. I think the US demand for highspeed ain't so high. iTunes isn't selling 720p video, and now one is offering IPTV accessible with Windows Media Player or QuickTime. I'm pondering the slower Comcast option. Slingbox? The phone or PDA screen is too small.

Back-end ISP functions, not the pipe, have massive competition. Anybody offers some e-mail and webspace hosting.

Redundant infrastructure is competition and provides efficenty. Competition means you must be efficient, or someone will out do you.

L | Aug 08, 2007 | 7:24PM

The "US" may not care about broadband leadership as long as the stockholders of Comcast, Cox, MSN are happy.

mike | Aug 08, 2007 | 8:43PM

The US is not unique in its dichotomy between Cable and Telco. Canada is in exactly the same position. Though with a much smaller population obviously.

I'd point out, however, that Canada has been ahead of the US since (at least) the late 90s in per capita computing communication usage.

You note that "even Canada" is ahead of the US. Which brings up an interesting point. Why is that? Given that we have the same infrastructure. I only have two real choices for broadband: TELUS (telco) or Shaw (cable). So I'd argue that Canada has even less choice than the US... yet we are still ahead somehow...?

Makes me wonder about the criteria for the OECD study.

chris | Aug 09, 2007 | 3:25PM

Back in the eighties NBTel (now Aliant) decided to run fibre throughout New Brunswick, which would explain why I have a 4Mbps ADSL for 40/month in a town of 5600.

John | Aug 09, 2007 | 9:32PM

I would almost agree with chris... *if* Bob had provided a link to the OECD report that he was drawing his conclusions to. I did not see any link to the alleged report.
Bob..if you're gonna quote from a sourse or use it as reference...PLEASE provide a hyperlink so we can go view the report ourselves so we can intelligently agree or disagree with your conclusions....

otherwise, as usual, an interesting read.

Doug | Aug 10, 2007 | 12:10PM

You're associating the health of the economy with customer accessibility to the Internet. What's really important to the economy is how accessible US business Internet sites are to all customers compared to the accessibility of other countries' business Internet sites to all customers. I assume this is about equal when comparing the US to other countries. So the Internet economy in the US is competitive with other countries' Internet economies, which means the US is not behind the rest of the world where it counts economically, in business connectivity.

bobc | Aug 10, 2007 | 1:26PM

Let's face it: The government will do anything to keep the People from getting together, let alone having a voice in their government. In a real democracy, or anything like it (as opposed to our fascist state, the private province of large corporations and behind-the-scenes operators (think Carlyle Group, e.g.), citizen participation is seen as a good thing. Here in the good ol' US of A, everything is done to keep voters from voting, to keep citizens informed, to prevent mass movements or citizen action. Of course we don't have decent braodband, and of course it's kept too expensive for millions of us, but not too expensive for the rich and powerful.

Mick | Aug 10, 2007 | 2:26PM

Hi Bob,

You've got many parts of the story right, but a couple of small but critical details are missing or misstated.


You write that "The Telecommunications Act of 1996 was intended to open up communication services to broad competition on the most basic level, so of course the nation has since 1996 gone from 15 national broadband ISPs to five and a dozen big landline telephone companies to three." Of course those fifteen were themselves the byproducts of the previous decade's pro-competitive regulatory intervention, i.e., the 1984 AT&T breakup. That's where the US parted ways with the rest of the world -- by separating "long distance" assets and "value-added services" from "basic telecom", i.e., local service and last-mile facilities. That first intervention created the conditions of possibility for the Internet itself (or at least for it to become more than just an inter-campus experiment). The second intervention was merely intended to extend the achievements of the first, by further eroding the power of bottleneck last-mile facilities owners to hobble, co-opt, and preempt innovation and market entry by anyone/everyone else. Ultimately the scheme failed because the key ingredient that permitted the whole Internet economy to get started in the first place -- i.e., political will, skill, and determination to create and sustain a competitive market in telecom services, i.e., the essential building blocks of Internet service delivery -- gradually disappeared.


Then you write that the US is permanently crippled by the existence of parallel/redundant access facilities -- copper and coax -- for at last two-thirds of US households. This is a great rebuttal to the mantra of "facilities-based competition" (itself just a special case of our current fetish for investment for investment's sake), but a bit overstated I think. Platform competition is likely to keep each type of facility weaker than it might have been in isolation (food for thought for wireless-oriented developing countries), and nothing could be be more wasteful and self-destructive than to compel would-be new entrants to build additional redundant facilities platforms -- each of which (that survive) will ultimately be capable of carrying many orders of magnitude more bandwidth than any individual or household could ever require, even into the distant (e.g., fully immersive HD VR) future. The colossal, Carl Sagan scale waste that will go into such redundant platforms will be the price we all pay for our collective failure to make sensible use of the political tools that democracy has provided us, to establish and police a sane competition policy.


You also write that US telcos and MSOs never cared or even thought much about about the US' role in the world. Knowledge and understanding are certainly not lacking (anyone who recalls and understands the mid-1990s global settlements rebalancing crisis can attest to this). And the implicit contrast you set up between Japanese and US telcos is false. NTT did not happily or patriotically enter into the (TCA96-inspired) facilities unbundling arrangements that made Softbank/YahooBB and Japan the market it is today. Bwtween 1997-1999, the Japanese regulator attempted to foster innovation and competition (in what was then the most expensive telecom market on Earth) with a US/1984-style structural reorg, breaking NTT into two regional operating companies plus a long-haul, value-added operator. When (c. early 2001) that ultimately failed to change incentives/behaviors enough to relieve the critical access facilities bottleneck, Japanese government leaders stepped in and exercised their equity power as NTT's largest shareholder, and "strongly advised" NTT management to offer unbundled metro and local access facilities on commercially viable terms. SoftBank was merely the largest, fastest, and best capitalized player to take advantage of the new opening -- and the rest is history.

I continue to try to imagine a future where wireless access will be sufficiently competitive with terrestrial-based networks on cost, capacity, and performance terms to make the exercise of political judgment and will unnecessary. Unfortunately, I have a much easier time imagining a future where the "standard basket of online content and services" continues to grow in bandwidth and performance requirements at a pace far greater than improvements in wireless technology. Maybe it's just a failure of imagination. If not, and we as citizens continue to be beholden to the prevailing pure-market fantasy, then your pessimism is likely to be a lot more persuasive before 2018, when history suggests we'll get another turn at the regulatory wheel...

Tom Vest | Aug 10, 2007 | 6:58PM

This whole broadband dilemma is akin to the affordable housing problems we are witnessing here in the US. Overall, it seems to me that the giant providers of the above services are more conscience of profits and serving a select group of people(wealthy), than they are of meeting the needs of the population, in full. In my area, an extra $99+ is needed to upgrade to BB.
That's quite a hike for a working class retiree.
Houses start at $450,000, apartments rent from close to $2,000 a month, for a 1 BR. This is my point ... BB providers are, in reality, separating classes, and in the long run, losing potential clients. As such, how can they be equal to overseas groups, whose aim is to please a broader range of clients?

Thank you for your very educational, well-written column.

JOHN | Aug 12, 2007 | 11:52AM