more on Krugman on "Digital Robber Barons", nyt 6 Dec

[Dave Farber <dave () farber net>]

------ Forwarded Message
From: Dana Blankenhorn <danablankenhorn () mindspring com>
Reply-To: Dana Blankenhorn <danablankenhorn () mindspring com>
Date: Fri, 06 Dec 2002 11:46:51 -0500
To: dave () farber net
Subject: Re: <[IP]> Krugman on "Digital Robber Barons", nyt 6 Dec

http://www.corante.com/mooreslore/20021201.shtml#14444

An Easy Mistake to Make

The FCC is planning on re-monopolizing the wired Internet. The agency will
not only allow cable companies to keep competing ISPs off their lines, but
extend this to the Bell companies. If BellSouth wants, for instance, it can
force me to move my DSL service to them from Earthlink, or lose the wired
access.

Naturally liberals are aghast. Paul Krugman calls the wired boys "Digital
Robber Barons." (free registration required) On the surface it looks
terrible, and personally it will be inconvenient.

But Krugman doesn’t know about wireless. He doesn’t know about WISPs, and he
doesn’t know about UltraWide Band (UWB). Why should he? He’s not a tech
writer. Wireless is "inside baseball," the province of a small number of
hobbyists and entrepreneurs. And how can it compete with the phone and cable
monopolies?

The answer is Moore’s Law. Between the 802.11 A and B standards we’ve got
plenty of digital space to play with, in unlicensed frequencies. The
necessary equipment gets cheaper and better every year.

In accounting terms, wireless equipment is 3-year property. Buy it, install
it, and three years later you’ll be motivated to upgrade. The user pays.
That’s the way cell phones work. The only reason you have powerful carriers
there is because they’re using licensed frequencies. The 802.11 standards
work on unlicensed frequencies.

In contrast wires are difficult and expensive to upgrade – it’s 30-year
property. And the carrier pays. Wired communications is a terribly
capital-intensive industry. That’s why competition there is naturally
limited.

Wireless is changing those rules. Combine wireless with competitive fiber
and you can bypass the Bells. Force competitive ISPs like Earthlink off the
wires and you have motivated entrepreneurs, tons of them. Result: the Bells
will die.

Michael Powell is going to sign their death warrant, simply by giving them
what they want. The Bells don’t understand Moore’s Law any better than their
critics do. Which is actually a good thing.

Dana Blankenhorn


-----Original Message-----
From: Dave Farber <dave () farber net>
To: ip <ip () v2 listbox com>
Date: Friday, December 06, 2002 11:24 AM
Subject: <[IP]> Krugman on "Digital Robber Barons", nyt 6 Dec


> ------ Forwarded Message
> From: Tim Finin <finin () cs umbc edu>
> Organization: http://CSEE.UMBC.EDU/
> Reply-To: finin () cs umbc edu
> Date: Thu, 05 Dec 2002 23:52:12 -0500
> To: dave () farber net
> Subject: Krugman on "Digital Robber Barons", nyt 6 Dec
>
> Digital Robber Barons?
> Paul Krugman, NY Times, December 6, 2002
> http://www.nytimes.com/2002/12/06/opinion/06KRUG.html
>
> Bad metaphors make bad policy. Everyone talks about the
> "information highway." But in economic terms the
> telecommunications network resembles not a highway but the
> railroad industry of the robber-baron era - that is, before
> it faced effective competition from trucking. And railroads
> eventually faced tough regulation, for good reason: they had
> a lot of market power, and often abused it.
>
> Yet the people making choices today about the future of the
> Internet - above all Michael Powell, chairman of the Federal
> Communications Commission - seem unaware of this
> history. They are full of enthusiasm for the wonders of
> deregulation, dismissive of concerns about market power. And
> meanwhile tomorrow's robber barons are fortifying their
> castles.
>
> ...
>
>
>
> ------ End of Forwarded Message
>
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