[Chtechcomm] A few thoughts about broadband...

Chad A. Johnston johnston at thepeopleschannel.org
Thu Aug 18 18:01:23 EDT 2005

I thought this might be of interest to the group.
Read below...

Chad Johnston - Station Director
The Peoples Channel 
300AC South Elliott Road
Chapel Hill, NC  27514

"Don't be too timid and squeamish about your actions. 
All life is an experiment. 
The more experiments you make the better."
	Ralph Waldo Emerson

"If I had my life to live over... I'd dare to make more mistakes next time."
	Nadine Stair

"Laws alone can not secure freedom of expression; 
in order that every man present his views without penalty 
there must be spirit of tolerance in the entire population."
	Albert Einstein

-------- Original Message --------
Subject: 	[CAnet - news] Broadband reality check
Date: 	Fri, 12 Aug 2005 09:12:06 -0400
From: 	Bill St.Arnaud <bill.st.arnaud at canarie.ca>
Reply-To: 	bill.st.arnaud at canarie.ca
To: 	<news at canarie.ca>

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 [Here are 2 different perspectives on the state of broadband in the US. But
the analysis and conclusions can be applied to most other countries in the
world.  These debates on broadband penetration remind me of the fear
mongering 20 years ago when North America was far behind the rest of the
world in terms of deployment of videotext.  France, at that time, seemed to
be way ahead with its national Minitel system, while in US it was chaos with
no coordinated strategy.  But despite the appearance of chaos, in the bowels
of a number US universities some boffins were working on something called
the Internet...as they say the rest is history.

I remain a firm believer that the private sector remains the best vehicle
for deployment of broadband with facilities based competition. The
government's only role should be to ensure a competitive, level playing
field and funding research in the next generation of technologies and their

But ensuring competition does not mean hobbling the incumbents with
regulation. I support the recent decision to remove open access requirements
on DSL.  This has already resulted in some new creative solutions in the US
where companies like Earthlink and AOL are partnering with municipalities to
independently deploy broadband.

In my personal opinion, municipal governments can play a critical role in
the deployment of broadband (and earn valuable revenue), while at the same
time not violating any regulations on right of ways or compete with private
sector, by building, on a non-exclusive basis, conduit and condominium dark
fiber networks open to all.  Deregulation, I believe, will accelerate these
new innovative approaches.

I always point to the Montreal CSEVM municipal conduit networks as a good
model of this type of approach, which has won one high praise from
competitors and incumbents alike.  End of editorial - BSA]

[Thanks to Jere Retzer for this pointer from a posting on Gordon Cook's
Arch-econ list -- BSA]

I recommend this paper:

I think it is consistent with my view that the ways to stimulate broadband
penetration are: (1) lower the costs (notably franchise and right-of-way
costs/obstacles) [see my note above - BSA]; (2) increase the anticipated ROI
(related to #1 but also includes encouraging connections from a demand
perspective via eduaction, communities of interest, applications); (3)
increase competition (by anyone including if necessary government), which
has the effect of creating an opportunity cost of NOT taking action (if
company A is serving 10 markets and have substantial competition in five
they are likely to invest more in those five; if they can hold revenues with
no investment they might also not invest at all): and (4) reduce the price
to the consumer (including competition and reduced costs to the providers as
well as reduced taxes on the service to the consumer - our US taxes on
telecom services including universal service charges are quite high) will
naturally stimulate consumer demand, "take rate" and therefore penetration.
Where I think UNE fouled things up is that the ILECs perceived that by
investing in broadband infrastructure they helped the competition so that
they were better off not deploying or slowly deploying DSL to avoid feeding
the CLECs. One question I have is how do you encourage "open" IP services so
that you can have local ISPs as envisioned in Brand X without discouraging
access providers from investing? All of this begs the question of what is
the best use of universal service funds?
[From posting by Dwayne Hendricks on Dave Farber's IPer list -- BSA]

     Free Press, the Consumer Federation of America and Consumers  
Union released a report today detailing the ways in which the FCC's  
recent positive assessment of US broadband penetration is misleading  
and glosses over serious problems behind an ever-widening digital  

     The three groups have called on Congress to take notice of  
alarming trends and enact clear policies that will free the broadband  
market from domination by a handful of large cable and  
telecommunications companies. Their recommendations include ensuring  
open access to all high-speed communications networks, removing  
restrictions on public entities that seek to offer broadband services  
to consumers, and opening up more of the broadcast spectrum for  
wireless Internet applications.

     A full copy of the report, Broadband Reality Check, is available  

Among the findings:

.        The FCC overstates broadband penetration rates. The FCC  
report considers a ZIP code covered by broadband service if just one  
person subscribes. No consideration is given to price, speed or  
availability of that connection throughout the area.

.        The FCC misrepresents exactly how many connections are "high- 
speed." The FCC defines "high-speed" as 200 kilobits per second,  
barely enough to receive low-quality streaming video and far below  
what other countries consider to be a high-speed connection.

.        The United States remains 16th in the world in broadband  
penetration per capita. The United States also ranks 16th in terms of  
broadband growth rates, suggesting our world ranking won't improve  
any time soon. On a per megabit basis, U.S. consumers pay 10 to 25  
times more than broadband users in Japan.

.        Despite FCC claims, digital divide persists and is growing  
wider. Broadband adoption is largely dependent on socio-economic  
status. In addition, broadband penetration in urban and suburban in  
areas is double that of rural areas.

.        Reports of a broadband "price war" are misleading. Analysis  
of "low-priced" introductory offers by companies like SBC and Comcast  
reveal them to be little more than bait-and-switch gimmicks.

.        The FCC ignores the lack of competition in the broadband  
market. Cable and DSL providers control almost 98 percent of the  
residential and small-business broadband market. Yet the FCC recently  
eliminated "open access" requirements for DSL companies to lease  
their lines, rules that fostered the only true competition in the  
broadband market.
Weblog at: <http://weblog.warpspeed.com>

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