Let’s take a look at one of the predominant reasons broadband isn’t being deployed at a much faster rate and at far greater speeds. If you were to ask any ISP what the biggest single deterrent to deploying broadband is, I believe you would receive a near uniform reply – the cost of upstream connectivity.
This brings up an interesting point, why does the cost to connect to the Internet seem so expensive? The obvious reply would be that the cost to purchase, deploy and maintain the necessary infrastructure is astronomical. There is certainly something to be said for that. A quick look at pricing for a high-end router or 10 miles of fiber (let alone the labor involved in hanging it) shows the cost to be not for the faint of heart. Verizon plans to invest $800 million in 2005 alone just in deploying fiber for the Fios project. Verizon claims that this investment will deploy this service to 1 million homes. If we can believe these numbers, Verizon will connect these 1 million homes for $800/each. Not too bad considering that this will allow Verizon to supply not only telephone and high speed Internet but also TV along with a bunch of other services I am sure they are looking forward to billing us for.
Along these lines, we need to look at what Verizon provides us with and at what price. Verizon’s DSL offering provides a 1.5Mbps connection for $29.95/month plus a pile of additional fees. I also get my T1 from Verizon at a cost of well over $1K/month based on the longest term contract they offer. I have to admit my uptime has been exceptional (certainly as compared to what I am hearing about Verizon’s DSL in this area) but the cost has stayed the same for over a decade even though the cost of the equipment has dropped to a fraction of what it was even when I ordered my T1 over five years ago.
Now, we are being told that Fios will provide 30Mbps down with 5Mbps up for $199/month yet Verizon’s T1s will still remain at the same price.
I guess the real question is whether or not Verizon (and the rest of the remaining ILECs) are really acting in the “public good” as their charter mandates. The next question we need to ask ourselves is whether we consider Internet service to be an “essential service” as we do telecommunications.
If we consider Internet to be an essential service and we also mandate that the ILECs continue to act in the public good, how do we reconcile the ILECs charging such high prices for independent companies to connect to the Internet. Let’s face it, a fair portion of the independent ISPs are the only choice for most of the country – especially in rural areas. To allow the ILECs to create this level of pricing, in effect, stifling the deployment of new Internet infrastructure certainly cannot be construed as working in the public’s best interest.
As a comparison, I thought it might be interesting to look at the way the incumbents run their business model and apply it to another public utility, the water company. Would we allow the access to our drinking water to be “rationed” so as to create wealth for an entity that is supposed to be working for us? What kind of impact would this kind of management system have had on the independent farmer? Would this model have worked well for our country or the world as a whole?
I see the parallel as being quite apt in this case. The stranglehold the ILECs have on our connectivity is largely preventing the wholesale deployment of broadband from happening in this country. If T1 lines were to cost $100/month there would be no limit to the amount of independent companies, neighborhood organizations or informal groups sharing all levels of service. The explosion would happen so fast that I think it would be hard for the ILECs to handle all of the business – profitable business – I would submit.
So, why isn’t this happening?
In a word – control. What we are talking about here is a huge industry, a powerful force that isn’t really interested in public good. In fact, as anyone who remembers the Ma Bell era, public good was the last thing Ma Bell seemed to be concerned with. Many of us that are old enough to remember that time in history are now beginning to become deathly afraid that those days are rapidly returning. With the recent spate of mergers and buyouts we are now beginning to see the rebirth of Ma Bell in all her former glory – a frightful sight indeed.
Perhaps we should all be looking into whether or not the ILECs are serving the public good. This is the key point here. The ILECs are a regulated monopoly that is protected so they can serve the public. If we believe the ILECs are working for their own good (as a for profit company should be doing) we need to ask ourselves if we should continue giving the ILECs the protected status they currently enjoy. I have no problem with Ma Bell acting in her own best interest – in fact, I encourage it. However, if this is the way the monopoly wishes to go forward then they need to understand there is a very different set of laws they will need to conform to.
It is time we look at the ILECs monopoly status, their ability to manipulate numbers to show that they can sell DSL circuits wholesale for just about the same price the sell to the end user. The fact is that the ILECs have somehow managed to become the center of the net. This is a curious thing from my perspective as I don’t remember anyone appointing them the guardian of the net nor do I think they should be allowed to continue.
This bring up the question of where should the center of the net be located and who should have control? More to the point, should anyone have control? Alternately, should we create more than one “Internet” that allows for interconnection as people might want. This would allow for the segregation of many of the undesirable sites from those who would like a squeaky clean Internet while still allowing for a “wild west” style Internet that many of us are used to and enjoy.
If I had to speculate, we will slowly start to see a second “net” begin to form. I suspect this is already happening in places as people are forming small networks to enjoy network gaming, file sharing, etc. Personally, if this happened we would lose some of the potential that make the Internet great. The promise of entire world being able to communicate freely, to teach and to learn, to share experiences along with our emotions is the potential we could lose.
It’s time that we are a people demand the return of the Internet to us, the people who it was created for and by. We conceived it, we spent the money to build it and it is ours – not some evangelical who knows better than we do about how we should live our lives and certainly not some antiquated company that is having trouble finding relevance in today’s world. I look forward to a time when the sound of a dialtone evokes memories similar to the ones I get every time I here a modem connect.
And that day is coming, perhaps not fast enough for some people like me but all too fast for those who are having a difficult time adapting to this rapidly changing world.
I’m sure Charles Darwin would wish them all the luck in the world – they will most certainly need it.