Last week I posted another installment in my ongoing series about the possibility of metering bandwidth in the future (“Why Not Meter Broadband Pipes?”) Make sure to read the comments to that post because the essay provoked an interesting discussion and some outstanding suggestions from our savvy TLF readers.
On a related note, Mark Desautels, Vice President of Wireless Internet Development at the CTIA (the wireless industry’s trade association) has an editorial in RCR Wireless News today entitled, “Paying for the Bandwidth We Consume.” Mark poses a question that I have raised in some of my posts on this issue:
Much is made of the fact that consumers prefer flat-rate pricing because they know what it is going to cost each month, and that is understandable. But it also creates (potentially) huge subsidies between users. My question is: If consumers were aware of the amount of the subsidies they might be paying, would they be as opposed to paying for the bandwidth they actually use as is generally believed?
That really is an interesting question and the guys over as DSL Reports point out that there are tools that users can download to help us answer that question. They are also running a poll right now asking people how much bandwidth they use per month.
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Do land line telephones have a future? Yes. . .but not a long one. Cell phones, VOIP, and Device Based Telephony are quickly making copper phone lines an anachronism. Eli Lehrer, a colleague of mine at CEI, discusses how deregulation may help to keep copper online a little longer and urges government to get out of the way of emerging telephony technologies in a new paper entitled “Keeping the Voices Alive.”
I don’t think the government should act in anyway to prop-up the endangered and soon-to-be extinct copper cable phone system, but there is no reason for government to act to hasten its death and squander resources in the process–the exact point Eli makes. Eli also points out the ill effects of E-911 and universal service participation on new voice technologies.
It’s a quick read that makes a very salient point about the transition from copper to fiber and how the static regulatory system has a chance to reform and improve in the face of the dynamic telecommunications market.
Well I apologize if I’m starting to sound like a broken record by asking this question yet again, but what would be wrong with metered pricing for broadband pipes? I have asked that question several times before, most recently in my post earlier this week on wi-fi piggybacking. I pose it again today in light of another article about a handful of customers apparently having their broadband connection cut-off because of excessive downloading.
According to a front-page article in today’s Washington Post entitled “Shutting Down Big Downloaders“:
As Internet service providers try to keep up with the demand for increasingly sophisticated online entertainment such as high-definition movies, streaming TV shows and interactive games, such caps could become more common, some analysts said. It’s unclear how many customers have lost Internet service because of overuse. So far, only Comcast customers have reported being affected. Comcast said only a small fraction of its customers use enough bandwidth to warrant pulling the plug on their service.
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We took the podcast on the road this week and recorded at our Alcohol Liberation Front event on the last day of the PFF Aspen Summit conference. First off, Bill Rosenblatt of DRMWatch.com tells us why he thinks fair use might just be a quaint old notion that’s on its way out the door. We continue the fair use discussion with Solveig Singleton of PFF and Jim Harper of the Cato Institute. Finally, Adam Thierer of PFF and Declan McCullagh of C-Net’s News.com discuss the specter of data retention mandates.
There are several ways to listen to the TLF Podcast. You can press play on the player below to listen right now, or download the MP3 file. You can also subscribe to the podcast by clicking on the button for your preferred service. And do us a favor, Digg this podcast!
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My former PFF colleague Randy May points out that the FCC just got around to deregulating the rules governing the provision of long distance service by Bell operating companies (BOCs). The FCC’s new order concludes that:
“The old framework included requirements that the BOCs separate their local telephone and long distance operations, which is at odds with a market environment where local and long distance services increasingly are marketed and provided on a bundled basis. The new
framework replaces those more burdensome regulations with less intrusive measures that protect important customer interests while allowing the BOCs and their independent incumbent LEC affiliates to respond to marketplace demands efficiently and effectively.”
This all should have happened a decade ago. The rules were just as intrusive and unnecessary back then as they are today. Apparently, however, it takes a market almost completely disappearing before the FCC will deregulate it. But hey, better late than never, I guess.
I thought I’d continue the conversation Tim started a few days ago about utility trenching and libertarian property rights theory by starting a new post since this issue is quite interesting to me and I’d like to keep the conversation going.
In response to Tim’s essay I argued that: “Property rights are flexible at the margins… They have to be to ensure a well-functioning society,” and that… “Similar flexibility is necessary to ensure that various types of networks get built (sewage lines, sidewalks, gas and power lines, and even communications systems).” Thus, we allow occasional trenching in people’s yards to ensure that that happens.
In response, Tim says:
I’m having trouble seeing a principled difference between that and the “open access” regimes we libertarians criticized in the 1990s. The only difference I can see is that the open access regulations of the 1990s infringed on the property rights of the ILECs rather than the property rights of millions of homeowners. It’s not clear to me why one would be less objectionable than the other.
My response: There is a world of difference between a utility (or a city) digging up one’s yard, sidewalk, or street corner every once and awhile and the open access regimes of the 1990s and the present, which demand the full-time surrender / confiscation of private property to achieve the hubristic goals of economic central planners. The former (trenching) is a short-term inconvenience with significant long-term benefit. That latter (forced access regulation) gives rise to a massive regulatory regime that requires ongoing policy interventions and price controls. Forced access destroys the incentives to innovate and invest in new networks or network expansion. Trenching–and the momentary inconvenience is causes–does not. It allows for network expansion. Forced access regulation discourages it.
When we were both at Cato, Wayne Crews and I wrote an entire book about these issues entitled “What’s Yours Is Mine: Open Access and the Rise of Infrastructure Socialism.” We go into these issues in greater detail in that book.
More bad press for the muni wi-fi movement. It seems like each week brings another story of how things haven’t quite turned out as planned. This week, it’s Business Week with a story about “Why Wi-Fi Networks Are Floundering.” In the piece, author Olga Kharif argues that:
The static crackling around municipal wireless networks is getting worse. San Francisco Wi-Fi, perhaps the highest-profile project among the hundreds announced over the past few years, is in limbo. Milwaukee is delaying its plan to offer citywide wireless Internet access. The network build-out in Philadelphia, the trailblazer among major cities embracing wireless as a vital new form of municipal infrastructure, is progressing slower than expected.
These potholes in the nation’s wireless rollout of civic ambition—criticized by many as an improper use of tax dollars—are hardly the exception. For the road is getting bumpier for cities and the companies they have partnered with in a bid to blanket their streets with high-speed Internet access at little or no cost to users.
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ASPEN, Colo. – Federal Communications Commission Chairman Kevin Martin on Tuesday offered two proposals that he said would address concerns about objectionable content and add “access to new voices in the media.”
Martin repeated his proposal to require cable operators to sell television programming a la carte, or on a per-channel basis. “The ability to pick and choose among the content being offered them by the cable operators,” he said at the Aspen Forum on Communications and Society here.
Parents would have “much have meaningful choices” in the programming they could watch, he said. Currently, “there is little or no incentive for the market or programmers to respond” to parents’ demands for less racy content.
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If you’re following the ongoing debate over efforts to mandate a la carte regulation for cable and satellite TV, there’s an interesting piece in yesterday’s Wall Street Journal entitled, “TV Channels Move to Web, Think Outside the Cable Box” [subscription only] that deserves your attention. Author Bobby White argues that “The Internet is offering a new outlet for voices — including those of ethnic minorities — that weren’t heard from as much under old media.” He highlights how the Black Family Channel and some other new networks that haven’t found a home on the cable dial have decided to give it a go online instead:
Across the cable TV industry, other independent channels are also turning away from TV to the Internet. The Lime Channel, which focuses on healthy living, pulled out of cable last year and now offers its programming online and as video on demand. The Employment and Career Channel, which began streaming online in 2002, has junked its attempts to be a cable TV channel to be an online-only outlet. Others, like the Horror Channel and HorseTV (which revolves around equestrian events), have also opted to go online.
The shift illustrates how the Internet is offering a second chance to certain segments of old media. Web-based TV is now becoming a more viable business route, and Internet video is exploding. Running an online-only video channel, which doesn’t require expensive cameras and broadcasting gear, is cheaper than operating a cable TV channel. While starting a new cable channel today takes an initial investment of $100 million to $200 million, a broadband channel needs just $5 million to $10 million to get going, says Boston-based research firm Broadband Directions.
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Do you mean to tell me that muni wi-fi networks will actually cost money? I’m shocked, shocked, I tell you. Where’s the free lunch we were promised?!
[see San Jose Mercury News story below]
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Municipal WiFi: A not-so-free lunch
by Sarah Jane Tribble
Mercury News
08/06/2007
It’s been more than a year since Silicon Valley’s Joint Venture Wireless Project first announced plans to build a regional wireless network, giving millions of local residents free access to the Internet. But that network won’t be so free after all, and the area’s millions of local residents may not really use it.
While initially the project was lauded as a way to give the masses affordable Internet, key organizers have gently shifted the focus of the network from serving residents, for free, to giving businesses and city governments wireless access, for a price. …
But the increasing focus on dollars and cents reflects a trend nationwide: As cities strive to provide wireless Internet service, they’re realizing it can’t truly be free.
[Read the rest here.]
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