Slate article: Free American broadband!

[Owen Densmore]

We've discussed the poor broadband in the US.  A graph was sent out a  
while back showing the US as 17th in the world.

Many states and cities in the US periodically look at innovative ways  
to provide broadband as a "utility" and even using common utility  
assets such as IPoverPower and similar stunts.  Palo Alto CA was  
rolling out a fiber-to-the-home utility when we left in 2002.

Stephen is using an innovative solution: Basic Cable + Cable Modem +  
Vonage. Much cheaper and with many benefits such as web interface to  
phone history.

     -- Owen

Owen Densmore
http://backspaces.net - http://redfish.com - http://friam.org


Free American broadband!

In France, you can get super-fast DSL, unlimited phone service and  
100 TV channels for a mere $38 a month. Why does the same thing cost  
so much more in the U.S.?
By S. Derek Turner

Oct. 18, 2005 | Next time you sit down to pay your cable-modem or DSL  
bill, consider this: Most Japanese consumers can get an Internet  
connection that's 16 times faster than the typical American DSL line  
for a mere $22 per month.

Across the globe, it's the same story. In France, DSL service that is  
10 times faster than the typical United States connection; 100 TV  
channels and unlimited telephone service cost only $38 per month. In  
South Korea, super-fast connections are common for less than $30 per  
month. Places as diverse as Finland, Canada and Hong Kong all have  
much faster Internet connections at a lower cost than what is  
available here. In fact, since 2001, the U.S. has slipped from fourth  
to 16th in the world in broadband use per capita. While other  
countries are taking advantage of the technological, business and  
education opportunities of the broadband era, America remains lost in  
transition.

How did this happen? Why has the U.S. fallen so far behind the rest  
of its economic peers? The answer is simple. These nations all have  
something the U.S. lacks: a national broadband policy, one that  
actively encourages competition among providers, leading to lower  
consumer prices and better service.

Instead, the U.S. has a handful of unelected and unaccountable  
corporate giants that control our vital telecommunications  
infrastructure. This has led not only to a digital divide between the  
U.S. and the rest of the advanced world but to one inside the U.S.  
itself. Currently, broadband services in America remain unavailable  
for many living in rural and poorer urban areas, and remain slow and  
expensive for those who do have access.

For instance, when farmers gathered at this year's Iowa State Fair to  
discuss their policy concerns with U.S. Secretary of Agriculture Mike  
Johanns, the topic on the minds of many was broadband. And for good  
reason. Twenty-five percent of Iowa's rural communities have no  
access to high-speed Internet service, and over half of the remaining  
rural communities are serviced by only one provider. Those lucky  
enough to live in areas served by Iowa Telecom can pay as much as  
$170 per month for a DSL line.

President Bush has called for "universal, affordable access to  
broadband technology by the year 2007," and Federal Communications  
Commission chairman Kevin Martin recently declared broadband  
deployment to be his "highest priority." Martin recently took to the  
pages of the Wall Street Journal to tout "the dramatic growth in  
broadband services." In his editorial he boasts of "fierce  
competition" among broadband providers and tells us we're "well on  
our way to accomplishing the President's goal."

The facts tell a different story. Today, major cable companies and  
DSL providers control almost 98 percent of the residential and small-
business broadband market. This trend is the direct result of FCC  
policies that fail to encourage real competition among broadband  
providers, giving free rein over the market to the cable and DSL  
giants. The corporate giants are also vigorously fighting to stop  
cities and towns from building "Community Internet" systems --  
affordable, high-speed broadband services funded in part by community  
groups and municipalities -- even in places where the cable and DSL  
companies themselves don't offer service. Yet, like rural  
electrification projects in the early 20th century, today's Community  
Internet projects offer the best hope of achieving universal  
broadband service.

Like so many other challenges faced by the Bush administration, the  
response to the growing digital divide has been to redefine success  
and prematurely declare victory.

In the 1996 Telecommunications Act, Congress directed the FCC to  
oversee the timely deployment of Internet services that "enable users  
to originate and receive high quality voice, data, graphics, and  
video telecommunications." Currently, this requirement translates  
into an Internet connection with typical download and upload speeds  
between 10 Mbps and 20 Mbps (megabits, or million bits, per second).

But the FCC defines a "high-speed" connection as one capable of  
transmitting data at a rate of 200 kbps (kilobits, or a thousand  
bits, per second) in one direction -- about four times the speed of  
dial-up. At this slow speed, it is barely possible to receive low-
quality streaming video, and is completely impractical to originate  
high-quality video.

The typical download speed of a DSL connection in the U.S. is 1.5  
Mbps, while the average cable-modem connection downloads at 3 Mbps.  
These connections are adequate for streaming low- to standard-quality  
video, but are far too slow for applications like high-definition  
video. Furthermore, they pale in comparison to what is being offered  
in Japan, where consumers can download high-definition movies in less  
than five minutes.

Setting the high-speed standard so low allows Martin and the FCC to  
portray the increase in mediocre connections as a sign of progress.  
Other countries define broadband in a more honest way. For example,  
Canada has declared the minimum standard for broadband to be 1.5 Mbps  
in both directions -- more than seven times faster than what the FCC  
considers to be "advanced service."

Defenders of the status quo like Martin argue that since the U.S.  
spans a huge geographical area, it is wrong for us to expect the  
level of high-speed broadband service that Western Europe or Asia  
enjoy. But this ignores the success of sparsely populated nations  
like Canada, and cannot explain why densely populated cities such as  
San Francisco do not have access to the same types of high-speed  
connections found in Seoul, South Korea, or Tokyo.

Martin's failure to confront the broadband problem becomes painfully  
obvious when you consider how his commission measures broadband  
availability and adoption. Instead of counting the number of  
subscribers in a particular area, the FCC considers an entire ZIP  
code as "covered" if at least one person living in that area has a  
broadband connection. This allows the FCC to make misleading boasts  
about how broadband coverage reaches 99 percent of the country.

Consider the case of Loudoun County, Va., a high-tech community just  
outside of Washington that's home to Internet giant America Online.  
The FCC claims there are more than six broadband providers, on  
average, within each Loudoun County ZIP code. But a recent survey  
revealed that one-third of the county's households are unable to  
purchase any broadband service.

Nationwide, the reality is only one in three urban and suburban  
American adults have broadband at home, and only one in six adults  
living in rural areas do. Furthermore, the choice of broadband  
providers available to these consumers is paltry. The FCC's own data  
show that nearly 20 percent of all Americans report having no cable  
or DSL service providers in their neighborhood, and another 28  
percent only had access to one provider. In President Bush's home  
state of Texas, for example, 93 counties have only one broadband  
provider and 16 counties offer no service at all.

Most of the countries surpassing the U.S. in broadband speed and  
availability have "open access" rules governing both their cable and  
DSL industries. Open access rules require the owner of a network to  
allow its competitors access to the network at wholesale prices.  
These rules usually apply to networks that are "natural monopolies"  
like telephone systems and railroads, and in order to ensure  
innovation among competitors, these provisions usually do not apply  
to newly built infrastructure. Ultimately, open access benefits  
consumers by creating competition that leads to lower prices and new  
innovative services. You can credit open access with the drop in long-
distance rates seen in the 1990s.

Nations like Canada long ago mandated that the local cable and  
telephone monopolies provide competing Internet Service Providers  
(ISPs) access to their networks at wholesale cost. However, here in  
the U.S., the FCC -- backed by the Supreme Court in the Brand-X case  
-- took the bizarre step of exempting cable Internet providers from  
all open access rules, while applying them in a limited fashion to  
the incumbent DSL companies.

The Brand-X ruling affirmed an FCC decision to classify cable modem  
service as an "information service" and not a "telecommunications  
service." Under the 1996 Telecommunications Act, information service  
providers are not subject to the open access regulations that are  
applied to telecommunications providers, such as DSL companies. To  
assert that cable-modem services have no telecommunications component  
is simply bizarre. Indeed, Justice Antonin Scalia said in his  
dissent, "When all is said and done, after all the regulatory cant  
has been translated, and the smoke of regulatory expertise has blown  
away, it remains perfectly clear that someone who sells cable-modem  
service is 'offering' telecommunications."

The Supreme Court's decision in effect ensures that consumers have no  
choice among cable-modem providers. This is because almost all  
municipalities grant a single cable provider the right-of-way to lay  
cable wire, in exchange for a portion of its local revenues --  
usually 5 percent.

While almost no competition exists within local cable Internet  
markets, consumers in some larger cities have been able to choose  
among several DSL providers. (Although thanks to other FCC decisions,  
customers often must purchase a phone line in addition to their DSL  
service.)

But the FCC recently decided to cut off this last frontier of  
competition by ending most of the remaining open access provisions  
governing the DSL industry. Bush's FCC believes that open access is  
restricting innovation in broadband services.

However, the FCC's own data indicates that open access in the DSL  
sector has contributed to growth in DSL services and the weakening of  
the cable companies' monopoly power over the broadband market. It  
appears that the FCC is acting under pressure from telecom companies,  
which are demanding a "level playing field" in the wake of Brand-X.  
This move will permanently entrench a cable-DSL duopoly over the  
broadband market, ensuring higher prices and lousy service for  
consumers.

Now, some may see the recent "price wars" between such popular  
providers as Comcast and SBC as a signal that the market is  
functioning properly. Closer examination of introductory offers  
reveals them to be nothing more than bait-and-switch gimmicks.

SBC's $14.95 per month offer for its "DSL-express" service -- rolled  
out with much fanfare earlier this year -- is merely an introductory  
rate, which requires signing a long-term contract with an expensive  
termination penalty. Furthermore, subscribers must be new SBC DSL  
customers, and must purchase the DSL along with the additional cost  
of SBC telephone service. The connection itself is extremely slow by  
most standards of "broadband," as it only offers a maximum upload  
speed of 384 kbps. When spread out over three years, the true cost of  
the SBC offer is about $25 per month, not including the cost of the  
phone line, taxes and other fees. When these additional charges are  
included, the total cost averages out to well over $40 per month.

Rick Lindner, chief financial officer of SBC, told investors the  
offer was simply a way to lure customers away from cable companies  
and sell them other SBC products. Lindner explained that bundling low-
cost DSL with phone service "suddenly takes you from ... being a $15  
product to being a $65 or a $70 customer." He joked: "We're out to  
pillage and plunder the industry, that's our objective."

The most promising alternative to the cable-DSL duopoly is Community  
Internet -- universal, affordable high-speed broadband service  
provided by cities and towns or community groups. Hundreds of places  
-- from Philadelphia and San Francisco to Chaska, Minn., and  
Granbury, Texas -- are now viewing broadband as a public service, no  
different from water, gas or electricity. They are building Community  
Internet and municipal broadband projects to bring high-speed  
Internet to areas overcharged or underserved by the cable and DSL  
companies.

Community Internet projects come in many different forms, utilizing  
different technologies and various business models. Some projects are  
built and operated exclusively by a municipality, while many others  
operate under public-private partnership agreements. Although a few  
places receive broadband over power lines, or fiber laid directly to  
homes, the majority of Community Internet projects utilize "Wi-Fi"  
technology to create "hot-spot" zones of broadband coverage or, in  
many cases, build a "mesh network" to blanket an entire city. San  
Francisco Mayor Gavin Newsom is currently taking bids to build just  
such a network in his city, with Google offering to provide the  
service for free.

The story of tiny Scottsburg, Ind., illustrates how Community  
Internet can provide needed services that keep jobs and resources in  
the local economy. In 2002, Scottsburg Mayor Bill Graham was  
confronted with the possibility of two local businesses leaving town  
because his city had no broadband service. One of the companies  
nearly lost a key defense contract because its dial-up Internet  
connection repeatedly failed as it was trying to send in a bid.

The mayor contacted cable and DSL providers, who told him outright  
that providing broadband in his town just didn't make business sense.  
As Graham told the PBS program "Now": "We were in a crisis mode. We  
were gonna lose companies, gonna lose jobs. We just had to do  
something, you know. How many jobs can a small community lose? None."

A committee formed by the city to find a viable solution to this  
problem quickly concluded that the answer was to construct a  
municipal wireless network. The city created the Citizens  
Communication Corporation, and within four months installed wireless  
transmitters on water and electric towers, producing a network that  
reaches over 90 percent of the county's residents.

After the Scottsburg network was up and running, several DSL  
companies (the very same ones that had refused to service Scottsburg)  
went to the Indiana statehouse to lobby in support of a bill that  
would have prevented any other towns in the state from creating their  
own Community Internet systems. Fortunately, the powerful testimony  
of Mayor Graham convinced legislators to kill the SBC-backed bill.

However, across the nation, the cable and telecom companies, armed  
with powerful lobbyists and coin-operated "experts" are quietly  
working the halls of state legislatures and Congress in a concerted  
effort to kill off Community Internet. Over the past several years,  
14 states enacted laws that ban or place limits on municipalities  
from building Community Internet projects.

Over the summer, Rep. Pete Sessions (R-Texas) -- a former SBC  
executive -- introduced an anti-Community Internet bill with the  
Orwellian title "Preserving Innovation in Telecom Act of 2005." The  
legislation would prevent any city in the country from providing  
Internet access if a private entity offers service nearby -- even if  
the private company serves as little as 10 percent of the residents.

Community Internet opponents routinely accuse municipal broadband  
providers of being an unfairly advantaged competitor and offering an  
inferior service doomed to fail and bankrupt taxpayers. But the  
allegation that municipal broadband providers hold an unfair  
advantage because they are the beneficiaries of special tax and legal  
treatments doesn't hold water.

For decades, the incumbent cable and Bell companies have enjoyed all  
the benefits of a protected monopoly status, granted to them by the  
FCC and by local municipalities. And over the past several years,  
these companies have received hundreds of millions of taxpayer  
dollars to subsidize their broadband deployment efforts. The truth is  
that Community Internet projects pay taxes just like any other  
competitor. In fact, a study by the Florida Municipal Energy  
Association showed that private incumbent providers pay fewer taxes  
than municipal systems and receive more state and federal subsidies.

In addition to providing broadband to underserved areas, Community  
Internet projects often entice other competitors into the market. The  
same Florida study found that municipal construction of communication  
networks expanded "the number of private firms serving the same  
market by more than 60 percent."

Yet the big cable and telecom companies continue to spread  
misinformation. A "fact sheet" distributed to journalists earlier  
this year by Verizon, detailing supposed failures of Community  
Internet projects, was found to be full of errors and mistakes,  
relying primarily on a 7-year-old discredited study of municipal  
cable TV networks.

Notably, municipal networks are arising because of the failures of  
the incumbent providers. Without them, the U.S. will continue to fall  
behind the rest of the world in broadband technology. Nations such as  
Canada and South Korea long ago realized the importance of public  
broadband, and incorporated municipal systems into their overall  
broadband strategies.

There are signs, though, that the tide may be turning in the U.S.  
against the cable and Bell companies. This year, spurred in part by  
success stories in places like Scottsburg, anti-municipal broadband  
bills were defeated in seven states and delayed in two others. Sens.  
John McCain, R-Ariz., and Frank Lautenberg, D-N.J., have introduced a  
bill that would allow municipalities to provide Internet service and  
overturn existing state anti-municipal broadband laws. The bills are  
expected to receive further attention this fall.

But Congress needs to do more than just allow Community Internet  
projects. It needs to free up valuable "spectrum" for these wireless  
networks to operate on. Currently, most Wi-Fi devices operate on an  
unlicensed basis in the "2.4 GHz" region of the spectrum -- a crowded  
area occupied by hundreds of different types of consumer devices such  
as microwave ovens and cordless phones. The physical properties of  
this end of the spectrum prevent wireless signals from penetrating  
obstacles and terrain. This means citywide networks using the 2.4 GHz  
band will require large amounts of antennae, raising the overall  
price of deployment.

If wireless networks were able to operate on lower-frequency spectrum  
-- such as the region used by over-the-air television stations -- the  
infrastructure costs would be much lower, potentially allowing  
Community Internet networks to offer extremely fast connections for  
as little as $10 per month.

In most areas, even in large markets like Los Angeles, large portions  
of the television spectrum go unused. (Just attach an antenna to your  
TV to see how many channels it picks up -- odds are it will be less  
than a dozen, and most of those will barely be visible.) Congress  
should allow low-power wireless devices to operate on these valuable  
but unused channels.

Similarly, Congress could set aside a portion of the spectrum coming  
back to the government from the broadcasters, as part of the digital  
television transition. The current plan is to auction off this  
valuable resource to the cellphone companies to cover the cost of the  
war and tax cuts. But it's hard to imagine a better use of the public  
airwaves than opening up the spectrum for everyone to use.

But the answer doesn't lie solely in government either. What is  
needed is a truly competitive market, with many providers engaging in  
innovation that ultimately benefits all consumers. Government can  
play a role in making the market more competitive -- both by  
deploying Community Internet projects and by requiring the cable and  
telephone companies to provide open access to their networks.

American innovation offers a solution to our broadband problem. It's  
time for Congress, the FCC and the White House to stop protecting the  
corporate dinosaurs and start exploring alternatives that will foster  
a genuine free market in high-speed Internet services.



-- By S. Derek Turner