Four background statements and a question:
1. FCC says that as of about 2012 about 90% of Americans will be able to buy 50-100 Mbps download speeds – for high-speed Internet access. (Asymmetric upload, but that’s for another day.)
2. At that point, however, 75-85% of the population (again, according to the Commission) will likely have only one choice of provider for this kind of speed: their local cable operator. The major cable systems have clustered their operations and don’t compete with one another.
3. Verizon’s FiOS fiber-to-the-home Internet access service is and will be competitive with the cable high-speed access, but Verizon does not plan to expand this service. (Boston, Baltimore, and Alexandria, forget it.) So that’s why 75-85% of Americans will have only one choice of provider.
4. Satellite providers can get you content, but not the same kinds of Internet access speeds that your cable operator will be able to provide. FiOS can get you speeds, but not the same sports and other content that cable can. And DSL and wireless just can’t compete on the speed factor.
Then what happens?
The point of the rhetorical question would seem to be that with Verizon and satellite out of the picture, 50-100 Mbps broadband access will be a local monopoly controlled by the cable companies. But that may be like worrying about whether Cadillac and later Mercedes had monopolies on luxury cars. How many people will truly need 50-100 Mbps speeds in 2012? Among the failings of the national broadband plan was that it didn’t address this question. If there are six people in a household and they all want to watch their own high definition program streamed over the Internet, they still aren’t going to need that much speed, which may be the reason Verizon isn’t expanding its service area.
But going back to the rhetorical question that is the subject of the post, if such high-speed broadband access is a monopoly service then there are at least three choices: 1) the FCC could regulate it and by “regulate” I mean full rate of return regulation; 2) the FCC could do nothing; or 3) the FCC might take a middle ground and separate the business of laying fiber from the ISP business and regulate the former. At the moment, I don’t see that there is the political will in Washington for choice 1 or 3. The phrase “Title II” regulation to me implies the third choice, which I think would meet the most resistance from the carriers. They won that fight with DSL and darn sure aren’t going to give it back.
(… quickly checking our Nat’l Broadband Plan … hmmmmmmm …)
You failed to mention that the monopoly broadband carrier may own the TV content flowing through the same cable. Do you think the anti-regulatory mood will roll over the anti-trust worries about this industry? This 1883 description of the telegraph monopoly sounds chillingly modern to me.
From “A lawyer” :
“How many people will truly need 50-100 Mbps speeds in 2012?”
Those speeds are broadly needed right now in places like the U.S. and the U.K. at a price people can AFFORD. They have those speeds at decent prices in Japan, So. Korea, and elsewhere. With a fatter pipe people can comfortably do distance learning, tele-medicine, video conference impulsively + cheaply, etc. It would be a disruptive technology as great as the railroad, telegraph, and telephone.
I think back to the 1970′s when I used teletypes (ASR 33s) at 110 baud to access a computer. Modems that were just under ten kbps were considered superb for business purposes in 1980. My employer’s T-1 (1.55 Mbps) connection was great in the late 1990′s for downloading Windows patches (several MB at a time). These days I can go to a public library, connect to the web via Wi-Fi, and download a OS CD image (up to 700MB) in minutes or tens of minutes depending on contention and the server.
But why do I have to go to the library ? Why are the Copper Clowns (both telco and cable) being allowed to lie to us in so many ways ? Where is the incremental tariff that says the land-line costs $X and each added service costs $Y, $Z, etc. ? What is hiding in those “Double Play” and “Triple Play” price bundles ?
P.S. “Cloud computing” is the latest fad phrase in info. tech. But to me it’s just another name for what a service bureau offers. I worked for one (Decimus) in the 1980′s and had access to a couple of others (GEISCO and CompuServe) at times. But for these services to really work we’re going to need fat pipes at a reasonable price. Take a look at the communities of Lafayette (LA), Wilson (NC), and Bristol (VA). When the Copper Clowns dragged their feet they went and did the work for themselves. Maybe the solution is to get the Copper Clowns out of the fiber business (along the lines of “You snooze, you lose.”).
I agree with the comments about “what do we do with faster bandwidths?” There are plenty of “next gen Youtube” models floating about and many of them can be supported.
I was an early broadband user, and one of the first to test the defunct Sprint ION service. I remember (if anyone has a pic of this, I will pay dearly for it) Yahoo had a section called “Broadband” at the time (2000). You could watch a Superman movie streamed at 5 Mbps. It was revolutionary.
In short, the andwer to the lawyer is “software and database distribution.” We cannot have enough.
I disagree on the assessment of wireless not having/ doing/ being enough. The marginal costs to extend wireless are far less than copper/ line conditioning/ etc. There’s more to do here.
While I firmly disagree on re-regulation, the issue is a very fair one. If it weren’t for 2005 de-regulation, the choice would be zero, not one for the areas in your column. Changing the rules after the investment does not promote future risk-taking and will send a shudder through the industry. Encourage and bypass incumbancy, and leave the regulators out of it.
You failed to mention that the monopoly broadband carrier may own the TV content flowing through the same cable. Do you think the anti-regulatory mood will roll over the anti-trust worries about this industry? This 1883 description of the telegraph monopoly sounds chillingly modern to me.
+1 with you Hary Lewis