Exo
36:2 NKJV
Then Moses called Bezalel and Aholiab, and every gifted artisan in whose
heart the LORD had put wisdom, everyone whose heart was stirred, to come and do
the work.
Give
Me Bandwidth . . . | The Weekly Standard http://tws.io/148Mb8Z
No one to root for in the net
neutrality debate.
FINDING IT HARD TO UNDERSTAND the "net
neutrality" debate? On one side are the hip, cool, billionaire web service
companies like Google, eBay, Yahoo, and even Microsoft. Net neutrality is their
rallying cry. Despite the fact that they are basically schlocky ad salesmen on
a grand scale, they're pushing this quaint, self-serving '60s notion that the
Internet is a town square--all for one and one for them, or something like
that. Everyone should be allowed to hang out in the town square and use it as
they please, one low price, eat all you want at the buffet.
On the other side are the monopolist plumbers
like Verizon and AT&T and Comcast. These are the folks who laid the pipe
that delivers the Internet--the blogs and pirated movies and photos of Shiloh
Brangelina--to your house or office. They think the Internet is more like a
giant shopping mall, and they're the mall owners. You the customer can walk
around as if you were in the town square, but the tenants (see billionaire web
service companies above) are going to have to pay for the upkeep of the
premises. If they're one of the anchor stores, they might pay a lot.
In an effort to skim their own fees off the
Google crowd, lobbyists and Congress have also taken up the fight. So far, the
telcos are winning--a bid to add net neutrality language to a
telecommunications bill was shot down 269-152 by the House on June 8--but this
is one of those bizarre issues where both sides are off their rocker.
If Congress doesn't act, does this mean Apple
might pay 10 cents per iTunes download to Bellsouth? Will Google have to pay 5
percent of ad revenue to AT&T for speedy delivery of your search results?
Will we pay $1 per video played in your browser to Comcast? Silly, right? Well,
not so fast, and that's the problem.
Telcos and cable companies have no choice but
to lobby for legislation that bars neutrality. Because without the ability to
extract money from the webbies for the use of their not-so-fast Alexander
Graham Bell-era wires (forget that you and I already overpay for this),
AT&T or Verizon might not have any business model going forward. With no
real competition, they'd rather keep U.S. telecommunications in the Flintstone
era and overcharge for calls to Grandma than upgrade their networks. Since
1998, telecommunications companies have outspent computer and Internet firms on
politicians $231 million to $71 million, just to keep the status quo.
Hate to break the news, but your
"fast" DSL Internet access is no longer considered high speed. In
parts of the world, cell phones are faster. Have you wondered why Internet
video doesn't fill your computer monitor and look like a DVD, but instead is
pixelated dreck in a tiny one or two inch square? Well, Comcast is dragging its
heels, too. With better video over the Internet, who would want E!, let alone
the Style Network? Because of this Fred and Wilma thinking, the United States
is 16th in the world in broadband use (behind Liechtenstein!) with East Timor
catching up fast. The French may burn Citroëns, but they get 10 megabits for 10
euros--50 times your "fast" Internet access for half the price.
That's just not right.
We'll never get 10 megabits to our homes, let
alone the multiples of that speed that are possible and affordable today if
these telco Goliaths keep covering up their crown jewels. As Dean Wormer might
put it: Fat, drunk (on profits), and stupid is no way to go through life, son.
But the answer is not regulations imposing net
neutrality. You can already smell the mandates and the loopholes once Congress
gets involved. Think special, high-speed priority for campaign commercials or
educational videos about global warming. Or roadblocks--like requiring
emergency 911 service--to try to kill off free Internet telephone services such
as Skype. And who knows what else? Network neutrality won't be the
laissez-faire sandbox its supporters think, but more like used kitty litter. We
all know that regulations beget more lobbyists. I'd rather let the market sort
these things out.
But what market? Phone lines, cable, and
cellular--i.e., the means of Internet access--are all regulated; their
operators are quasi-monopolies. Even if you end the monopolies, the incumbents
have the advantage of a huge head start. Broadcasters own valuable spectrum and
feed us cretinous shows like Wife Swap and The Bachelor. Cable has a lock on
our homes via local franchise bribes, er, fees, so we get Lifetime and Animal
Planet that no one watches. Satellite TV is content to charge just a hair under
cable's pricing umbrella. For phone companies, too much Internet bandwidth
would threaten their bread and butter--overpriced $25 per month (it's worth no
more than $1) phone service and hot innovations like call waiting.
page 2
No one to root for in the net neutrality
debate.
So how do we fix this? Are we stuck in telco
hell? Silicon Valley can ignite a political arms race and spend more on
lobbyists, but why play an old man's game? Instead, these webbies should get
creative, change the rules. Bam-Bam, not Barney Rubble is the future. Take the
telcos and cable companies out at the knees.
Here's an idea: Start screaming like a madman
and using four letter words--like K-E-L-O. And fancier words like "eminent
domain." I know, I know. This sounds wrong. These are privately owned
wires hanging on poles. But so what? The government-mandated owners have been
neglecting them for years--we are left with slums in need of redevelopment.
Horse-drawn trolleys ruled cities, too, but had to be destroyed to make way for
progress. How do we rip the telco's trolley tracks out and enable something
modern and real competition?
Forget the argument that telcos need to be
guaranteed a return on investment or they won't upgrade our bandwidth. No one
guarantees Intel a return before they spend billions in R&D on their next
Pentium chip to beat their competitors at AMD. No one guarantees Cisco a return
on their investment before they deploy their next router to beat Juniper. In
real, competitive markets, the market provides access to capital.
Without even being paid by the hour, I read
through the Supreme Court's Kelo v. City of New London eminent domain rulings.
Surely there exists some clever Silicon Valley counsel to twist the wording of
the precedent. The telcos may want to treat the Internet like a shopping mall
that they own, but the premises are looking awfully sketchy. So start with this
line: "Economic underdevelopment and stagnation are also threats to the
public sufficient to make their removal cognizable as a public purpose."
Sure, property rights are important, but that
doesn't mean we can't shake a cattle prod at our stagnant monopolists and say
"update or get out of the way." The mantra should be "megabits
to phones and gigabits to homes." We'll only get there via competition.
Regulations--even regulations that look friendly to the Googles and Yahoos and
hostile to the telcos--will just freeze us where we are today.
IN THE LONG RUN, technology doesn't sleep. You
can't keep competitive King Kong in chains. But why wait a decade while
lobbyists run interference? If Congress does nothing, we will probably end up
paying more for a fast network optimized for Internet phone calls and video and
shopping. But this may not be the only possible outcome. Maybe the incumbent
network providers--the Verizons, Comcasts, AT&Ts--can be made to compete;
threatening to seize their stagnating networks via eminent domain is just one
creative idea to get them to do this. A truly competitive, non-neutral network
could work, but only if we know its real economic value. If telcos or cable
charge too much, someone should be in a position to steal the customer. Maybe
then we'd see useful services and a better Internet. Sounds like capitalism.
What new things? It's not just more bandwidth
and better Internet video--how about no more phone numbers, just a name and the
service finds you? How about subscribing to a channel and being able to watch
it when and where you want, on your TV, iPod, or laptop? How about a baby monitor
you can view through your cell phone? Something worth paying for. And that's
just the easy stuff.
We don't even know what new things are
possible. Bandwidth is like putty in the hands of entrepreneurs--new
regulations are cement. We don't want a town square or a dilapidated mall--we
want a vibrant metropolis. Net neutrality is already the boring old status quo.
But don't give in to the cable/telco status quo either. Far better to have
competition, as long as it's real, than let Congress shape the coming communications
chaos and creativity.
Andy Kessler is a former hedge fund manager
turned author. His next book, The End of Medicine: How Silicon Valley (and
Naked Mice) Will Reboot Your Doctor, is out in July.
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