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45 Mbps sounds pretty good to me, anyone else?
December 22, 2008 9:49 AM   Subscribe

Looks like Telecoms cashed out hard, and we lost out. At this point I'm not sure if I should blame deregulation, closed door deals or endemic corporate greed. Maybe it's a little of all three. All I know is we've fallen behind and it wasn't supposed to work like this. Plus, don't mess with our internets.
posted by Mr. Crowley (48 comments total) 4 users marked this as a favorite

 
I CAN HAS TELECOM TIMECUBE?
posted by b1tr0t at 9:55 AM on December 22, 2008


Looks like that deregulation thing is working out great all the way around, eh?
posted by birdhaus at 10:06 AM on December 22, 2008 [1 favorite]


This is what happens when you try to force a natural monopoly/public good into the market and pretend that there is "competition" to keep things from getting out of hand. Why we handle our electronic infrastructure the way we do has always confused the hell out of me. I assumed we had fallen behind, I just didn't know we had also been taken for such a large ride.
posted by cimbrog at 10:08 AM on December 22, 2008


Suckers.
posted by radgardener at 10:09 AM on December 22, 2008


We should punch them in the dick.
posted by Caduceus at 10:10 AM on December 22, 2008 [1 favorite]


It sounds like the companies "promised" things and "made commitments" to get rate hikes, but the states didn't make it enforceable in any way, so the telecoms backed out as soon as possible. Probably because the rate commissions have no power besides setting rates.

I'm not sure what that "fallen behind" link is supposed to be, considering it is showing only Asian countries intentionally. (The US is 6114 kb/s according to the underlying page, which would put it in 4th after Japan, Korea and Singapore. The #s seem pretty bullshit all around though.)
posted by smackfu at 10:16 AM on December 22, 2008


the states didn't make it enforceable in any way

Don't forget Sternly Worded Letters!
posted by DU at 10:18 AM on December 22, 2008 [1 favorite]


Well ain't that a kick in the pants.

Seriously, does this surprise anyone? That's what happens when lobbyists for various corporations write the laws that govern their industries.
posted by delmoi at 10:25 AM on December 22, 2008


Don't worry, I'm sure Obama will get us all the internets for Christmas, with just a wave of his healing hand!
posted by klangklangston at 10:30 AM on December 22, 2008 [1 favorite]


We should punch them in the dick.

WHAT?
posted by ShawnStruck at 10:31 AM on December 22, 2008 [5 favorites]


Don't worry, I'm sure Obama will get us all the internets for Christmas, with just a wave of his healing hand!

Maybe Christmas '09, seeing as he's not president just yet. His healing hand only provides placebos for now.
posted by filthy light thief at 10:33 AM on December 22, 2008


The telecoms accidentally the whole internet.
posted by ryoshu at 10:37 AM on December 22, 2008 [4 favorites]


We should punch them in the dick.

WHAT?

Punch Em In The Dick. It's a good go-to response when I strongly dislike what someone has done.
posted by Caduceus at 10:37 AM on December 22, 2008 [1 favorite]


> This is what happens when you try to force a natural monopoly/public good into the market and pretend that there is "competition" to keep things from getting out of hand.

Connectivity is even more expensive in Canada, and with less offerings.

Several years back, in Ontario, the natural gas market was "deregulated", meaning that you could buy your gas with any supplier and get it delivered on the existing system. The existing nat. gas companies who owned the infrastructure had their part covered by non-negotiable fixed carriage fees. Some gas "marketers" immediately set up and the most agressive had commissioned people going door-to-door to get signups. Usually they would say something like "Hi we're just checking to make sure that you're getting savings on gas", they'd ask to look at your existing bill, and then say "OK everything's in order - just sign here". The contracts were 5-year lockin's with prohibitive early-exit clauses and stealth renewal clauses.

Net result - just about everyone pays more for natural gas. Deregulation of any natural monopoly seems to immediately spawn a whole new layer of skim.
posted by Artful Codger at 10:38 AM on December 22, 2008 [4 favorites]


We should punch them in the dick.

WHAT?


B'KOW!
posted by anthill at 10:52 AM on December 22, 2008 [2 favorites]


This can be read a lot of different ways. It can be a tale of corporate greed sure but it can also be read as a tale of government hubris. Future by fiat. Also about the difficulty of combining private sectors to public ends. Deregulation is problematic for a lot of reasons, but then so is regulation of a monopoly, and so is the state providing the infrastructure. There's no obvious really good answer to what you do with a natural monopoly. Telecom's even trickier than lots of other services because services don't just compete on price per unit as other infrastructure services do.

Plus the idea that these highspeed data networks should be applied equally to urban, suburban, and rural areas is a request for inefficiency. Rural places are nice in a lot of ways, but infrastructure for rural areas is much more expensive per capita because people live farther away from each other. Giving people in rural areas equal consideration is a waste of money. There is nothing wrong with living in a rural area but there's nothing especially great about it such that it merits a subsidy.

There are two big problems with the US telecom infrastructure relative to other countries. The first is the United States is less densely populated than Europe, or Modern Asia. The second is that we got started on telecom earlier so we have older stuff. It's like buying a computer now even though you know that if you waited and bought later you would be able to get a better computer. Just to be clear I'm not being a market cheerleader about this just pointing out some complexities that make every solution market included difficult.
posted by I Foody at 10:58 AM on December 22, 2008 [1 favorite]


It's a good go-to response when I strongly dislike what someone has done.

So, when motherfuckers talk shit, you punch 'em in the dick?
posted by ShawnStruck at 10:58 AM on December 22, 2008


He punched me in the dick.
posted by maxwelton at 11:17 AM on December 22, 2008


The case is simple: Do you have a 45 Mbps, bi-directional service to your home, paying around $40? Do you have 500+ channels and can choose any competitive service? You paid an estimated $2000 for this product even though you did not receive it and it may never be available. Do you want your money back and the companies held accountable?

This is stupid. The case isn't simple, because I don't want 45 Mbps, nor do I want 500 channels. What I want is 10Mbps cheap, and to pay for only the 15 channels that I will actually watch. But thanks for telling me what I want and in the process highlighting everything that is wrong with centralized planning.

The focus here completely ignores the cost to consumers. The emphasis should not be advancing technology and services independent of everything else. To get that 40Mbps to everyone at $40 required spending a lot of money on infrastructure build out and not spending that money elsewhere.

"America lost a decade of technological innovation". I'll let Google and Apple know that they lost out.
posted by Pastabagel at 11:24 AM on December 22, 2008 [4 favorites]


There is nothing wrong with living in a rural area but there's nothing especially great about it such that it merits a subsidy.

Unless you like eating the locally grown food such subsidies would tend to encourage production of, or you think it might be wise not to depend on favorable currency exchange rates to be able to feed your population as the US looks at a recovery package which may double again the national debt Bush just got through doubling during his eight years of profligate stupidity, that is.
posted by jamjam at 11:39 AM on December 22, 2008


Pastabagel: the issue is that in return for public funds, the telecoms offered to meet certain government set goals. Denying the utility of meeting those goals does nothing to mitigate the theft of those funds.
posted by idiopath at 11:49 AM on December 22, 2008


This comes up every few years and just like Enron didn't seem to be much of an issue in the national consciousness, neither is this. Best we send pot smokers to jail instead of enforcing business/government deals.

Will net infrastructure be part of the new infrastructure initiatives?

This is stupid. The case isn't simple, because I don't want 45 Mbps, nor do I want 500 channels. What I want is 10Mbps cheap, and to pay for only the 15 channels that I will actually watch. But thanks for telling me what I want and in the process highlighting everything that is wrong with centralized planning.

It's just an example. They're not telling anyone what they want. Saying that x amount of dollars equals something like y in terms of value is done all the time.

The focus here completely ignores the cost to consumers. The emphasis should not be advancing technology and services independent of everything else. To get that 40Mbps to everyone at $40 required spending a lot of money on infrastructure build out and not spending that money elsewhere.

But the money isn't spent elsewhere. It just goes down the pie holes of large corporations who do not adhere to the deals they make despite getting taxpayer's cash. I know it's entirely common place but still, it's irksome, to say the least.


"America lost a decade of technological innovation". I'll let Google and Apple know that they lost out.


I'd make a bet that the statement is meant to be taken in context and the technological innovation is not in reference to all technological innovation but in reference to comparable telecommunications infrastructure in other countries. But perhaps I'm making silly assumptions.
posted by juiceCake at 11:50 AM on December 22, 2008 [1 favorite]


JamJam: Unless those subsidies actually end up going mostly to corn syrup and cattle feed. Also the US has a long history of being a net agriculture exporter recently it's narrowed to the point of being almost untrue, but the US isn't going to have a lot of trouble feeding ourselves.

I'm not into playing city mouse country mouse, but really no, If I like eating locally grown food, I'll pay what it actually costs unless I don't feel like eating it for it's actual price. And yeah Bush increasing the national debt sucked. That's a good point but doesn't really have anything to do with what I was talking about.
posted by I Foody at 11:54 AM on December 22, 2008


I'd rather have the internet I have now and have kept the $.2T
posted by a robot made out of meat at 12:07 PM on December 22, 2008


Meh. Korea and Taiwan had very little established telecom infrastructure to deal with so it was relatively easier for them to build this stuff out. While I generally agree that NA telecoms are a pretty lazy lot, they're also regulated enough that they have to maintain a lot of expensive rural service. Real telco competition in the US would result in no one having telephone service past the city limits of the 200 biggest cities in the country. Which wouldn't make telco regulators very popular.
posted by GuyZero at 12:11 PM on December 22, 2008 [1 favorite]


This is stupid. The case isn't simple, because I don't want 45 Mbps, nor do I want 500 channels. What I want is 10Mbps cheap, and to pay for only the 15 channels that I will actually watch. But thanks for telling me what I want and in the process highlighting everything that is wrong with centralized planning.

Channels? I don't care about the frequency seperation of my transmission mediums any more, I care about programs. Not only do I not want 500 channels, I don't want any channels. I want good shows for cheap.
posted by garlic at 12:16 PM on December 22, 2008 [7 favorites]


As usual, it's all about you Pastabagel.
posted by Eekacat at 12:24 PM on December 22, 2008


"Corporation: an ingenious device for obtaining individual profit without individual responsibility." -- Ambrose Bierce, The Devil's Dictionary, 1911

Thus has it ever been.
posted by BitterOldPunk at 12:30 PM on December 22, 2008 [6 favorites]


I've been hearing about this for years. I have no idea if it's true, but I see little reason to doubt that the telcos would act like this. It would have been a sweet deal to get a big stack of cash for an agreement to do something "in the future", especially if that "something" is going to be difficult to quantify or set a firm timetable against.

And after a few years, everyone kinds of forgets about it, but no one asks about the getting the money back.

I kinda wish I could figure out a way to work a similar deal with my mortgage, actually.
posted by quin at 12:37 PM on December 22, 2008


Punch Em In The Dick.

Seems to me that Punch 'em in the dick is a straight-out rip-off of Thugnificent's classic Stomp 'em in the nuts.
posted by PeterMcDermott at 12:58 PM on December 22, 2008


I don't really mind the way electricity has been deregulated. Separating the fixed infrastructure from the actual energy transmitted seems pretty logical, because it breaks up the part that actually is a natural monopoly (the transmission and distribution lines) from generation, where competition and choice make sense. One bonus is that it lets people who are willing to pay extra for sustainably-generated power buy it and support that industry, gaining them a foothold in the market, even before such energy sources are necessarily price-competitive with unsustainable ones. I also think it's the first step towards microgeneration and distributed power generation, although that's a separate ball of wax.

Unfortunately, I think the deregulation schemes mostly didn't go far enough in taking control of the fixed infrastructure; specifically, taking it away from the newly privatized ex-monopoly utilities. Rather than leaving it with them to manage, as it was in many areas, I think it might have been better to place it directly under the control of a quasi-public agency (perhaps simply a corporation, a controlling interest of which is owned by the state). That way there's no conflict of interest between the people running the infrastructure and the providers operating over it. Ideally, what you want is something like state-run roads, over which both FedEx and UPS run their trucks.

If this model hasn't worked out I suspect in many cases it's because it was implemented somewhat halfheartedly, and with too many concessions made to old monopoly providers. Also, in many cases the schemes weren't clearly explained to the public, and confusion resulted.

In the case of data telecommunications, I think it's unfortunate that this model hasn't been adopted. Instead, a wholly-private model has been dominant, where there's no enforced separation between the entity owning the infrastructure and the entity offering services over it. If we took this route, you might have only one data-capable connection coming into your home (i.e. no duplication of services -- data-over-coax from one company and data-over-TWP from another -- you'd just have one line, probably fiber), but you could pick from any number of companies offering service over that line. Each offering would have to cover the running cost of the infrastructure (unless the infrastructure is funded from taxes, which is another option that might be appropriate in some situations), but beyond that it would be up to the competitive provider to determine what they wanted to ship over the connection.

It's hard to imagine how such a setup wouldn't result in much greater levels of service than our current system, where there's huge amounts of money and effort being spent duplicating the "last mile" in order to get around the CLEC and cableco monopolies. This is a complete waste: with very few exceptions, most people don't buy the same service from more than one provider, so they don't even get any benefit from the inherent redundancy. It would be much better to put the resources currently wasted on duplicate last-mile efforts (especially on marginal technologies like BPL) into building a single very robust and high-bandwidth network.

I certainly wouldn't want a "government ISP," but despite my general libertarian leanings, I don't have any problem in having local government do for the "information superhighway" what it does for the street in front of my house already.
posted by Kadin2048 at 1:20 PM on December 22, 2008 [2 favorites]


Korea and Taiwan had very little established telecom infrastructure to deal with so it was relatively easier for them to build this stuff out.

What difference does that make? It's not as if the existence of old wires prevents the installation of new circuits. Existing infrastructure makes buildout easier, not harder.

The issue is that the older, slower infrastructure reduces the incentive to create newer modern systems (especially if you've already pocketed the money).
posted by ryanrs at 1:20 PM on December 22, 2008


The issue is that the older, slower infrastructure reduces the incentive to create newer modern systems

Sorry if it wasn't clear, but that was my point. No one wants to run wire twice. So we get stuck with wire from 1910 while Korea gets wire from last week. And it's not even an issue of wire per se - it's the splits, patch panels and every other sloppy interconnection that raises the noise floor on NA POTS lines to a point where it's a small miracle we can run modern ASDL on them. I, for one, am happy simply having something better than ISDN.
posted by GuyZero at 1:37 PM on December 22, 2008


I certainly wouldn't want a "government ISP," but despite my general libertarian leanings, I don't have any problem in having local government do for the "information superhighway" what it does for the street in front of my house already.

Wouldn't a government ISP be more restricted in its ability to fuck the consumer, since it would be subject to Bill of Rights restrictions like unreasonable search and freedom of speech?
posted by Pope Guilty at 1:40 PM on December 22, 2008


The local electric supplier has been collecting a 2% surcharge every month for years from everyone in town. It's supposed to fund moving all the wiring in town underground. By now, they've collected millions, but work has not begun, and the power company does not respond to questions about when it will. I suspect that some lawsuits are about to erupt.
posted by Kirth Gerson at 1:46 PM on December 22, 2008


Wouldn't a government ISP be more restricted in its ability to fuck the consumer, since it would be subject to Bill of Rights restrictions like unreasonable search and freedom of speech?

The government has already proven it has no problem violating constitutional limitations and statutes when it installed Narus machines in AT&T's backbones.
posted by ryoshu at 1:48 PM on December 22, 2008 [2 favorites]


"Wouldn't a government ISP be more restricted in its ability to fuck the consumer, since it would be subject to Bill of Rights restrictions like unreasonable search and freedom of speech?"

Wow, your internet connection is so fast, it lets you post from an alternate reality where Gore won in 2000!
posted by klangklangston at 2:17 PM on December 22, 2008 [1 favorite]


>kadin2048: I don't really mind the way electricity has been deregulated.

I agree that in the case of electrical utility, deregulation makes it theoretically possible to allow more suppliers, including "microsuppliers".

But like gas I see the following going on:
- yes the infrastructure is broken out and billed separately, but it ends up being the same per residence, so I pay the same infrastructure cost as a monstor house using 4x the electricity or gas. Bit of a disincentive there.
- the "suppliers" drive you to a locked flat-rate scenario that's expensive to get out of, with no guarantees that you will save over market pricing. It's easy for them to get away with this because most people won't look up the market rate and can't calculate how they compare to the market. There are back-doors. Instead of the normal service number, I called the "special" number on their legal page; the call was answered right away, and my gas rate went from .45 to .29 per cubic meter. But averaged out we still paid more than market.

In general when the public vs private scenario comes up for discussion, I always look to railroads vs highways. The governments maintain the highways and streets and the system is extensive and heavily used. Railroad right-of-ways are privately owned, poorly maintained and they won't spend a dime on enhancements or expansion that doesn't have a fairly quick payback, and as a result passenger rail service has just about been killed off and more cargo has moved to trucking.
posted by Artful Codger at 2:19 PM on December 22, 2008


The government has already proven it has no problem violating constitutional limitations and statutes when it installed Narus machines in AT&T's backbones

But people were outraged and there was resistance to giving the telcos immunity.

If a private company is acting non-neutrally towards content and its providers, the contract-absolutists will "meh" that you give them your money, you use their network on their terms. The moderates will agree and the boycotters and decriers will be labelled anti-free-market hippies.
posted by morganw at 4:51 PM on December 22, 2008


All I and my uninformed perspective can say is that we're the country that sent people to the moon, we're sending them to Mars (we hope), we've started two wars, and we built electrical lines to everywhere people in live in the 1930's. We can and should be able to build government-funded fiber-optics all throughout the country.
posted by saysthis at 5:20 PM on December 22, 2008


A.T. & T. has donated more money through lobbyists than ANYONE since 1989. And yes, 40 million dollars and SEVERAL HUNDRED ACTIVE lobbyists buy a lot of legislation. As an industry insider, rest assured you are getting screwed in ways you havent even thought of yet. It is sickening.
posted by jcworth at 7:06 PM on December 22, 2008


His healing hand only provides placebos for now.

Check back in Dec 2009 - I'm guessing it'll be the same as it has ever been.
posted by rough ashlar at 7:51 PM on December 22, 2008


Open to ALL Competition: These networks were to be open to ALL competitors, not a closed-in network or deployed only where the phone company desired.

Actually, the whole thing started with Bill McGowan at MCI withlong distance competition.

Then came theTelecommunications Act of 1996, which established CLECs--Competitive Local Exchange Carriers, with which the phone companies (ILECs) we required to share their copper wires at wholesale rates. Despite the phone companies' red tape and high prices they imposedon CLECs and constant battles with the government, a number of CLECs popped up and there was real competition.

But also as part of this Act, the phone companies told the government--we'll make you a deal: we'll put up all the investment money to build out a fiber network in the US, but you deregulate it--basically let us have a monopoly with it (and lots of tax breaks). We'll keep sharing the copper, but you let us have the fiber to ourselves in exchange for us building it out.

This is one of the reasons when Verizon installs fiber, they very quietly pull out all of the copper--eliminating the legal requirement for competition.
posted by eye of newt at 7:55 PM on December 22, 2008


I always look to railroads vs highways.

That's nice. I get to look at one every day I leave my driveway. Across the road.

The governments maintain the highways and streets and the system is extensive and heavily used. Railroad right-of-ways are privately owned,

Funny thing that. The 40 acres of tax paid is not reduced for the road OR the rail road right of way. The tax bill is calling it 40 acres, yet the property line is on the other side of the tracks.

Oh, and the 20-40 feet between the road/rails that is not encumbered by road or train tracks rules and is 'owned' free and clear? Yea - can't DO anything with that either. Nor can the (up to) 100 feet on the other side of the tracks.

(And if one protests the above? Then that would 'break up' the natural 40 acres and that puts you into the higher tax rate. For added fun, you can't touch lake bed if you happen to have 'the states water' parked on top of that.)
posted by rough ashlar at 7:59 PM on December 22, 2008


rest assured you are getting screwed in ways you havent even thought of yet. It is sickening.

Yes we are. And I have a VERY active 'imagination' - so try and shock me insider....
posted by rough ashlar at 8:01 PM on December 22, 2008


Just to clarify something in my post above, when I said "CLEC" I meant "ILEC." As eye of newt points out, the ILECs were the incumbent monopoly telcos (the Baby Bells, in most cases), while the CLECs were competitive carriers who rented the lines and switch space from the Bells in order to offer an alternative.

Personally I think the CLEC system was a good one, and it should have been extended to Internet service. For a while it was -- you could get DSL service from a CLEC, rather than just from your local Bell/Verizon office -- but that was shut down a few years ago by the Bush administration,1 and a lot of independent DSL providers went with it. It was, IMO, one of the worst things to happen to telecommunications in the U.S. in the past two decades, easily. Had we stuck with the ILEC/CLEC model, we might have been well-positioned to transition from TWP to fiber in the future, with the legal and economic infrastructure already in place to allow consumers to choose between a variety of providers on the backend. Instead we get to choose whether to get screwed by the phone company or the cable company.

Optimally, I think there are many variants of the CLEC/ILEC model that could work out for telecom. In some areas, it might make the most sense to build out the physical infrastructure (the fiber) with tax dollars, and keep it publicly owned and managed directly by a public agency. This is essentially the 'road model.' However I don't think all municipalities are going to be interested in it; let's face it, there are a lot of places with bigger issues and more pressing needs for tax money than building-out data fiber. In other places, "condo fiber" might be more appropriate; this is where homeowners or groups of homeowners (HOAs, condo associations, etc.) actually deploy and own the "last mile" fiber to a central switching point, and then there's competition for the backhaul. I think this is a pretty interesting idea, but with the decline in new home construction I doubt it'll be very common for decades. (Plus, builders are notoriously conservative about building-in new technology into homes; given how hard it is to get a house with Cat5 instead of Cat3 in the walls, good luck with FTTC.) However, I could see it happening in new highrises, since one run of fiber could replace both TWP phone and coax video lines, cutting costs for the builder.

As to the services running over the fiber, there's definitely both room and a need for competition there. Various consumers want different levels and types of service. Some might want nothing but basic voice, others might want simple non-interactive television programming, while others might want Internet service and more sophisticated video services (like remote DVR service where the recording is done somewhere upstream and programming is all available on demand). Still others might want bleeding-edge services that aren't available or even invented today. It doesn't make sense to make customers who aren't interested in sophisticated services pay for them, and having a competitive marketplace helps ensure that demand will drive the development of new services. At the same time as we ensure that natural-monopoly situations are managed appropriately, we need to not throw the baby out with the bathwater: competitive markets can produce amazing results when the costs of entry aren't prohibitive and perverse incentives are minimized. It's a question of managing and directing that competition so it produces the desired ends, rather than viewing the competition as an end in itself.

(Plus, in my professional life I've seen government-run IT projects, especially Federal ones, spiral into complete disasters with such mind-numbing regularity that I left for the private sector because the widespread incompetence and acceptance of failure was making me into a very hateful person. Sure, government-run IT doesn't "have" to be that way, but I have zero faith that it would be any different in reality. The only government agencies I've ever encountered that left me with an impression of competence were the ones most people pushing publicly-run telecommunications wouldn't want near the whole thing, and they only achieve it through truly staggering expenditures of cash, and probably by concealing their failures well.)

There's a reason why we have publicly-funded roads, but not a government monopoly on trucking; it makes sense to publicly fund and manage the low-level infrastructure which must be available to everyone on an equal and ongoing basis to be useful, but deploying services over that infrastructure is better done by the more nimble private sector. Government agencies seem to do better when they have a concrete, long-term, and easily-measurable mission, rather than when they have to continually try to reinvent themselves to appeal to customers/voters.

1: See USTA v. FCC (2004). It was a court decision, but the Bush-led FCC rolled over in the wake of it and let the anti-monopoly rules die. This article is a good primer on the decision, and was written just after it and in the hope that the FCC would appeal it to the Supreme Court. The RBOC-lapdog FCC didn't, and the ruling stood -- meaning the reality we're now in represents the worst of all possible cases outlined in the article.
posted by Kadin2048 at 11:38 AM on December 23, 2008


Sure, government-run IT doesn't "have" to be that way, but I have zero faith that it would be any different in reality

So, nobody's probably reading this anymore, but, quick question: which countries lead the pack for highest average internet connection? Now, how did they get there?
posted by krinklyfig at 4:58 PM on December 24, 2008


LIKE A HEALING HAAAAAAAAAND

</Eldritch>
posted by Pope Guilty at 11:03 PM on December 24, 2008


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