Interesting People mailing list archives
Is competition likely in U.S. broadband?
From: David Farber <dave () farber net>
Date: Thu, 24 Jul 2008 15:41:45 -0700
________________________________________ From: Dave Burstein [daveb () dslprime com] Sent: Thursday, July 24, 2008 6:11 PM To: David Farber Subject: Is competition likely in U.S. broadband? Dave (for list if interesting) Is it realistic to expect a third or fourth U.S. wired network? I believe policy has to be designed to work well with only telcos and cablecos, unless and until we get more effective competition. Karl Auerbach is absolutely right more competition is a great way to improve things. Xavier Niel in France has just said that if they allow him into the wireless market he will cut prices by more than half, as he did for DSL. Jim Prentice in Canada reserved some of the spectrum in the auction for new entrants, and it looks as though Canada will soon go from 3 to 5 competitors and I expect to see marked improvements. I've asked top Wall Streeters including Simon Flannery and Dan Reingold about this, and the uniform answer is another broadband carrier almost certainly could not be funded, except in wireless. The cablecos and telcos simply have too big a cost advantage because they already have scale and that makes their costs so much lower. Stagg Newman came to a similar conclusion. Wireless is great and of primary importance, but unless technology improves a limited substitute. Ivan Seidenberg just said he hopes to get FIOS up to 100 meg (realistic) but his goal for wireless is only 3.5 meg. There's overlap, but if people want a fast connection wireless isn't enough. Practical implication: if people believe in solving broadband issues through competition, they need to show that there will be enough competitors to make it work. France and Japan are succeeding, but it would require massive policy changes that probably would be too late anyway. Unless and until we have effective competition, I think we have to solve problems realistically rather than with pipe dreams of a market. I wish that weren't true. Dave Burstein At 04:17 PM 7/24/2008, you wrote:
________________________________________ From: Karl Auerbach [karl () cavebear com] Sent: Thursday, July 24, 2008 2:05 PM To: David Farber Cc: ip Subject: Re: [IP] Internet founder blasts ISPs for hurting national interests David Farber wrote:Subject: Internet founder blasts ISPs for hurting national interests"Basically, it's like little kids in a tantrum: 'I'm not going to build this system unless you give me three scoops of ice cream and a pony,'"Let's see if I get this right... Let's consider an extremely large and market dominating search engine company that wants to build a new data center. So it shops around to find the community that will give it the biggest incentive package and tax breaks. I would imagine that this is considered OK. But for an ISP to try to even suggest that it might want to be selective when lawfully investing its money into capital expansions, well, that is somehow to be condemned? It might be unsavory to some, but the business of business is to make money, with the limits of law, over a short or long term. To condemn an entity for wanting to maximize the value of its investment dollar is about as meaningful as condemning a wolf for wanting to eat meat. (By the way there is actually a pretty good musical about what happens when you try to make wolfs into vegans.) Over the last 120 years (using the ICC and Sherman Anti Trust Act to mark the epoch) we have learned that sometimes it takes a change of laws or a regulatory body to curb abuses. But sometimes the legal framework that is created serves to foster and protect what can become an abusive system - consider how AT&T overcame its rival telephone companies by becoming a regulated monopoly and, within that regulatory framework, became The Phone Company - TPC (from the movie The President's Analyst.) We have often learned that a better answer is to build a regulatory and legal framework that encourages competition - so that the wolves fight one another rather than chase the bridal party's sled and devour the bride (how's that for an oddly placed literary reference?) The internet is suffering from too much concentration of ownership, I think we can all agree on that. We have too many Telcos, Verisigns, and Googles and too few Brett Glass' and Lariat. What we need are not so many rules that say "no" but more rules that say "yes" to new investment by new competitors. We need to open the doors so that new players will provide alternatives to the existing telco and cable TV local copper. --karl-- ------------------------------------------- Archives: https://www.listbox.com/member/archive/247/=now RSS Feed: https://www.listbox.com/member/archive/rss/247/ Powered by Listbox: http://www.listbox.com
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Current thread:
- Is competition likely in U.S. broadband? David Farber (Jul 24)
- <Possible follow-ups>
- Is competition likely in U.S. broadband? David Farber (Jul 25)
- Is competition likely in U.S. broadband? David Farber (Jul 26)
- Re: Is competition likely in U.S. broadband? David Farber (Jul 28)