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Harold Feld, Senior Vice President of Public Knowledge, is back on Community Broadband Bits to discuss five fundamental rules necessary to ensure we have a great telecommunications system that benefits everyone. Harold first appeared on our show in episode 23. Harold explains the Five Fundamentals here and includes a link to their full filing [pdf]. In short, the fundamentals are: Service to all Americans, Interconnection and Competition; Consumer Protection; Network Reliability; and Public Safety. The comments also include some thoughtful words about the balance between federal, state, and local governments in ensuring these five fundamentals. Read the transcript from our conversation here. We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address. This show is 25 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment! Listen to previous episodes here. You can can download this Mp3 file directly from here. Find more episodes in our podcast index. Thanks to mojo monkeys for the music, licensed using Creative Commons.
On Friday, I wrote a harsh, quick response to FCC Chairman's Genachowski's so-called gigabit challenge announced in a guest column on Forbes. Since then, I have learned more about the 1 Gbps Challenge and I have to reiterate my frustration with it. We need the Chairman to reduce barriers to community-owned networks, not just recognize their successes. I'm not the only one reacting this way - Karl Bode has a thoughtful response as well. Let me start by giving some credit: Thank you for recognizing that the cable and DSL companies are failing to deliver the networks communities need. This announcement should be used to pressure the existing providers to invest in their networks. It is another important piece of evidence that communities having to choose only between cable networks and a slower DSL option are being left behind. But we need to also recognize that pressuring the existing providers to do better is not a solution in itself. Our slow, overpriced networks are the symptom of a problem, not the problem itself. The problem is that the massive cable and DSL companies are unaccountable to most of the communities they serve. Begging for more investment is better than doing nothing, but solves few problems. I have a challenge for the FCC Chairman: Use your power to make it less of a challenge for communities to build the networks they need. For too long, you have sat silently by as massive telecommunications firms made it all but impossible for smaller entities - public and private - to build competing networks. When the FCC Chairman finally gets around to supporting communities with definitive action to reduce the many unnecessary industry-created barriers to competition, that will actually be praise-worthy. Communities are smart to find ways of building their own networks, whether by owning and operating or finding partners to help. Nearly all the communities in the U.S. that have gigabit (and symmetrical at that!) connectivity today are served by networks owned by the community.
In a column published today, Chairman Genachowski explains why the U.S. Needs 'Gigabit Communities.' It starts off with an accurate observation...
Walking the floor of the Consumer Electronics Show last week, I kept thinking of that line from Jaws, “You’re going to need a bigger boat.” All the Internet-connected, data-hungry gadgets that are coming to market sent a strikingly clear message: we’re going to need faster broadband networks. ... It’s essential to economic growth, job creation and U.S. competitiveness.Yes! If only the head of the Federal Communications Commission understood what is preventing us from building those networks. Hint: It isn't a lack of demand. Google was inundated with applications for its gigabit service. Hundreds of communities have built their own networks (some of which he praises). Local businesses get it. Mayors get it. City councils get it. And unlike Chairman Genachowski, they know what the problem is: little incentive for massive, established cable monopolies to invest in networks when they are harvesting record profits and subscribers have no other choices. Wall Street not only gets it, it actually rejoices in it!
Comcast's traditional Cable Communications continues to grow and generate copious cash flow.. We're big fans of the firm's Video and High-Speed Internet businesses because both are either monopolies or duopolies in their respective markets.What is our FCC Chair doing about this problem? He helped Comcast to grow even bigger, with more market power to crush those rivals that he is calling on to build gigabit test beds. Chairman G wants to spur hundreds of David's while refusing to curb Goliath's power. Bad news, Mr. Chairman, Goliath actually wins most of the time. Rather than doing his job, Genachowski is begging others to do it for him.
Susan Crawford, author of the just-released Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age, is our guest for the 29th episode of the Community Broadband Bits Podcast. A former adviser to President Obama, she has been a leading figure in the struggle to preserve an open Internet. Susan has long been an advocate of communities deciding for themselves if a community owned network is a wise investment and recognizes the benefits of smart government policies to prevent big companies like Comcast from dominating the telecommunications arena. We talk about her book and reactions to it -- big cable and telephone companies are attacking her under false pretenses by either putting words in her mouth or misrepresenting her main points. But we also discuss the steps concerned people can take to bring force some accountability on the big monopolies. We have previously noted Susan's words and presentations here and we noted some Captive Audience reviews here. Read the transcript from this episode here. We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address. This show is 17 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment! Listen to previous episodes here. You can download the Mp3 file of this episode directly from here. Find more episodes in our podcast index. Thanks to mojo monkeys for the music, licensed using Creative Commons.
I quickly read the just-released Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age, and came away quite excited by Susan Crawford's new book. Susan Crawford has been supportive of community owned networks and a loud voice against the poor policies that have allowed a few massive cable and telephone companies to monopolize our telecommunications. Her new book is a good resource for those just getting interested in this issue. After the book was released last week, Susan Crawford appeared on the Diane Rehm show -- an excellent 50 minute interview that comes highly recommended. Be aware that the cable/telephone industry is engaging in character assassination to prevent Susan's message from reverberating around the country. The book led to Sam Gustin's article in Time, "Is Broadband Internet Access a Public Utility?"
State and local laws that make it difficult — if not impossible — for new competition to emerge in broadband markets should be reformed, according to Crawford. For example, many states make it very difficult for municipalities to create public wireless networks, thanks to decades of state-level lobbying by the industry giants. In order to help local governments upgrade their communications grids, Crawford is calling for an infrastructure bank to help cities obtain affordable financing to help build high-speed fiber networks for their citizens. Finally, U.S. regulators should apply real oversight to the broadband industry to ensure that these market behemoths abide by open Internet principles and don’t price gouge consumers.Art Brodsky also reviewed the book on the Huffington Post. He leads with a reminder of the damage done by the NFL's replacement refs, an apt comparison given how poorly the FCC and Congress have protected the public. Susan will be our guest for the Community Broadband Bits Podcast (episode 29) on Tuesday, Jan 15, and I will be offering periodic thoughts on passages from the book in coming days/weeks.
From the "A Pox on Both Your Houses" files, Verizon is squaring off against greedy landlords in New York City as it tries to fix lines damaged by Superstorm Sandy. In short, Verizon needs access to the common areas of the multi-dwelling units (MDU or industry-speak for apartments) to fix or upgrade the lines. Verizon is using these repairs as an opportunity to transition connections from copper to its fiber optic FiOS system. AT&T and Verizon have been arguing that once a household transitions from a copper connection to FiOS (in the case of Verizon) or U-Verse (in the case of AT&T, which actually hasn't even changed the copper connection), they are using a fundamentally different, less regulated service. My conversation with Bruce Kushnick delved into some of these claims. Verizon's copper to fiber upgrade could actually therefore be an accountability downgrade if regulators agree that households deserve fewer protections on connections over fiber than over copper. This appears to be a major fight brewing -- how to regulate the same services over different types of connections. And this is where it gets interesting. Verizon, AT&T, and the other big cable/telcos are constantly arguing for deregulation, saying that the market is so competitive that the government should just get lost. But then Sandy rips through and landlords (that I have ZERO sympathy for) see an opportunity to shakedown Verizon. After all, Verizon is going to use the new connections to increase revenues from these households by selling more services (triple play over fiber). This seems a perfectly reasonable deregulated market showdown. But Verizon immediately goes crying to the state regulators: "The landlords aren't playing nice, force them to let us into their buildings!" Anyone who still believes competitive or free markets are synonymous with unregulated markets is fooling themselves. Big firms use deregulation or regulation in their attempts to corner and monopolize markets.
If you think the United States cannot afford to take a fiber optic cable to just about every home in the country, you might be surprised to find out that we have already paid for it. We just haven't received it. Our first podcast guest in 2013, Bruce Kushnick of the New Networks Institute, explains the $300 billion ripoff. Bruce and I discuss how the big telephone companies promised to build a fiber optic Internet in return for being allowed to increase their prices. This brings us to Kushnick's Law: "A regulated company will always renege on promises to provide public benefits tomorrow in exchange for regulatory and financial benefits today." The telephone companies raised their prices, but decided to give the proceeds out to shareholders rather than invest in the promised networks. We got higher prices and DSL rather than the fiber optic networks we were promised. Our regulators largely failed us, in part because the only people who pay attention to Public Utility Commissions are the industries regulated by them and the occasional underfunded consumer advocate. This is a very good introduction to why we all pay far too much for services that are too slow and insufficiently reliable. Read the transcript from this episode here. We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address. This show is 26 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment! Listen to previous episodes here. You can download the Mp3 file of this episode directly from here. Find more episodes in our podcast index. Thanks to mojo monkeys for the music, licensed using Creative Commons.
An article about health care in the 2012 November Wired offers a strong reminder of how important smart government policy plays in making markets function well.
In the early 1950s, it was nearly impossible to know the value of an automobile. They had prices, yes, but these would differ radically from dealer to dealer, the customer a pawn in the hands of the seller. This all changed in 1958, when US senator Mike Monroney of Oklahoma shepherded a bill through Congress requiring that official pricing information be glued to the window of every new automobile sold in the US. The “Monroney sticker,” as it came to be known, has been with us ever since. It became an effective means of disclosing the manufacturer’s suggested retail price, or MSRP, and a billboard for other data disclosures to the consumer: the car’s fuel economy, its environmental rating, and so on. The sticker price was one of the triumphs of consumer-rights legislation and has made buying a car an easier—though never altogether easy—experience. What’s more, window stickers made automobile pricing rational and understandable. A customer who knows the base price going in will expect more value coming out. In economic terms, the sticker turned a failed market flummoxed by information asymmetry into something resembling a functioning, price-driven marketplace.There are many smart government policies that could radically improve the telecommunications industry, collectively saving billions of dollars for Americans and businesses. Unfortunately, most of these policies have been ignored by Congress and the FCC, which have focused instead on the solutions put forth by the big cable and DSL companies to further their own narrow interests.
Susan Crawford's new book, Captive Audience: The Telecom Industry & Monopoly Power in the New Gilded Age, looks to be an excellent read for anyone regularly perusing this site. It is becoming available at bookstores near you. (For why we discourage buying from Amazon, see our Amazon Infographic.) Susan did a one hour presentation at Harvard to celebrate the release of her new book last week. Video below. We will feature an interview with Susan on a podcast in early 2009.