There oughta be a law. Oh wait, there is. It's called Truth-In-Advertising.
From the Wiki (links on the website) . . . .
....
Commercials
Throughout its history, HughesNet has run a series of television commercials featuring actress Margaret Easley. Each time the name of the service has changed, a new commercial has been filmed. The central message of each commercial is fairly consistent, stating to viewers that anyone in the continental United States can have Internet access and "all you need is a clear view of the southern sky." Most of the commercials are 60 seconds in length, but there have also been 30-second variants as well as 30-minute infomercial-length variants which are broadcast both on normal DirecTV channels as well as on DirecTV channel 227, a channel that DirecTV uses solely for its own infomercials.
One of the commercials had a demonstration of the service with web pages moving very fast, but if one looked at the program bar of IE, it says it is working offline. This means that they weren't connecting to the Internet when loading the pages, but browsing from their cache. As of May 2006, an older DirecWay commercial is hosted and viewable on Margaret Easley's website.
Wednesday, October 31, 2007
Tuesday, October 30, 2007
US Corporations are Laughable
From Techdirt . . . .
Comcast Will Fire Employees For Admitting That Comcast Uses Sandvine?
from the what-are-you-hiding? dept
We still can't figure out why Comcast doesn't just come right out and admit what it's doing in jamming certain kinds of traffic. It's not like it's a secret any more -- and the longer Comcast tries to play dumb on this, the worse it looks for the company. The oddest part, though, is that Comcast won't even admit that it's using Sandvine's traffic shaping equipment -- even though Sandvine clearly lists Comcast as a customer and has used them as a reference customer in news articles. Even worse, though is that Comcast has apparently now issued a bunch of ridiculous talking points to customer service reps about this issue. Apparently, the customer service folks are being told that if they deviate from the script, they risk getting terminated. The script even includes how to respond to a point blank question about Sandvine, refusing to admit what appears to be public knowledge at this point. It's not at all clear what Comcast thinks it gains in acting this way. It seems to have only made an awful lot of customers quite angry at the company. Lucky for Comcast, though, that the US broadband market is such a disaster many customers have nowhere else to go.
Comcast Will Fire Employees For Admitting That Comcast Uses Sandvine?
from the what-are-you-hiding? dept
We still can't figure out why Comcast doesn't just come right out and admit what it's doing in jamming certain kinds of traffic. It's not like it's a secret any more -- and the longer Comcast tries to play dumb on this, the worse it looks for the company. The oddest part, though, is that Comcast won't even admit that it's using Sandvine's traffic shaping equipment -- even though Sandvine clearly lists Comcast as a customer and has used them as a reference customer in news articles. Even worse, though is that Comcast has apparently now issued a bunch of ridiculous talking points to customer service reps about this issue. Apparently, the customer service folks are being told that if they deviate from the script, they risk getting terminated. The script even includes how to respond to a point blank question about Sandvine, refusing to admit what appears to be public knowledge at this point. It's not at all clear what Comcast thinks it gains in acting this way. It seems to have only made an awful lot of customers quite angry at the company. Lucky for Comcast, though, that the US broadband market is such a disaster many customers have nowhere else to go.
Traffic Shaping and HughesNet
Last week, if you have HughesNet as your dialup-over-the-satellite ISP, you noticed your speeds took a hit. This week, you'll notice if you have any pages with multiple picture files (ie. jpg, png), your page load times will literally take minutes (PLURAL and MORE than a few minutes).
All part of HughesNet "traffic shaping" strategy to try to get you to upgrade from the overpriced $60/mth service to something more expensive.
Where Japan and other countries are providing more bandwidth for less cost, the US has allowed corporations to do the exact opposite.
This is why the US competive edge was lost. This is why investors are looking at other places to do business instead of the US.
Something tells me all the MBAs running companies these days think it's a license to run the business in the ground and run their customers off.
Something tells me that strategy is working.
All part of HughesNet "traffic shaping" strategy to try to get you to upgrade from the overpriced $60/mth service to something more expensive.
Where Japan and other countries are providing more bandwidth for less cost, the US has allowed corporations to do the exact opposite.
This is why the US competive edge was lost. This is why investors are looking at other places to do business instead of the US.
Something tells me all the MBAs running companies these days think it's a license to run the business in the ground and run their customers off.
Something tells me that strategy is working.
Friday, October 26, 2007
From the billionaire columnist who earned his money the old fashioned way....he married it.
And who's pretty much of a no-talent otherwise. The closest he's been to work is when his chauffer drives him to the office. Wonder what the real estate heiress saw in him anyway?
From Techdirt . . . .
Old Fogeyism Isn't That Surprising
from the kids-these-days dept
Last week Thomas Friedman penned a silly column claiming that Internet-based activism doesn't "count" as real political engagement. "Activism can only be uploaded, the old-fashioned way — by young voters speaking truth to power, face to face, in big numbers, on campuses or the Washington Mall. Virtual politics is just that — virtual," he says. As various people have pointed out, this is complete nonsense. I engaged in some campus activism in college in the late 1990s, and I have trouble even imagining how students coordinated their activities in the pre-email days. Blogs have proven an incredibly potent force for rooting out and publicizing injustice. And I'm sure the technologies that have evolved since I graduated are just as valuable to campus activists. Obviously, online activism by itself doesn't accomplish anything, but by the same token neither do telephone calls or newspaper columns. Rather, these are all tools that activists can use to coordinate their activities more efficiently. Many of the people who sign up for candidates' Facebook groups do go to the candidates' rallies or volunteer for their campaigns.
However, I think we shouldn't be too hard on Friedman. After all, it's pretty common for older people to complain about young people and their new-fangled ways of doing things. There are journalism professors who believe that you have to publish on paper to "count" as a serious journalist. There were lots of people who looked down their noses at Internet dating when it began, and some people still sneer at efforts to improve the online matchmaking process. And of course, there are books arguing that volunteer-driven content like Wikipedia is destroying our culture by undermining traditional ways of organizing information. Most of these arguments are silly, obviously, but it's not that hard to understand where they're coming from. If you've spent decades thinking about an activity in a particular way (if, say, you've been a print journalist for 30 years) you're going to have deeply-ingrained assumptions about how that activity is supposed to be done. And so when people start doing it a different way, it's inevitably going to seem incomprehensible and weird. So while I think Friedman's wrong, I don't think Friedman's being particularly obtuse. He's just fallen prey to garden-variety old fogeyism.
From Techdirt . . . .
Old Fogeyism Isn't That Surprising
from the kids-these-days dept
Last week Thomas Friedman penned a silly column claiming that Internet-based activism doesn't "count" as real political engagement. "Activism can only be uploaded, the old-fashioned way — by young voters speaking truth to power, face to face, in big numbers, on campuses or the Washington Mall. Virtual politics is just that — virtual," he says. As various people have pointed out, this is complete nonsense. I engaged in some campus activism in college in the late 1990s, and I have trouble even imagining how students coordinated their activities in the pre-email days. Blogs have proven an incredibly potent force for rooting out and publicizing injustice. And I'm sure the technologies that have evolved since I graduated are just as valuable to campus activists. Obviously, online activism by itself doesn't accomplish anything, but by the same token neither do telephone calls or newspaper columns. Rather, these are all tools that activists can use to coordinate their activities more efficiently. Many of the people who sign up for candidates' Facebook groups do go to the candidates' rallies or volunteer for their campaigns.
However, I think we shouldn't be too hard on Friedman. After all, it's pretty common for older people to complain about young people and their new-fangled ways of doing things. There are journalism professors who believe that you have to publish on paper to "count" as a serious journalist. There were lots of people who looked down their noses at Internet dating when it began, and some people still sneer at efforts to improve the online matchmaking process. And of course, there are books arguing that volunteer-driven content like Wikipedia is destroying our culture by undermining traditional ways of organizing information. Most of these arguments are silly, obviously, but it's not that hard to understand where they're coming from. If you've spent decades thinking about an activity in a particular way (if, say, you've been a print journalist for 30 years) you're going to have deeply-ingrained assumptions about how that activity is supposed to be done. And so when people start doing it a different way, it's inevitably going to seem incomprehensible and weird. So while I think Friedman's wrong, I don't think Friedman's being particularly obtuse. He's just fallen prey to garden-variety old fogeyism.
Liar liar pants on fire
From techdirt . . . .
Associated Press Confirms That Comcast Blocks Some BitTorrent Traffic; Despite Comcast Denials
from the someone's-not-being-totally-honest-here... dept
Back in August, there was a report that Comcast was throttling certain types of BitTorrent traffic making it difficult to impossible to seed a download. In response, Comcast vehemently denied this was happening, despite many people saying they were experiencing it. Specifically, Comcast said: "the company doesn't actively look at the applications or content that its customers download over the network. But Comcast does reserve the right to cut off service to customers who abuse the network by using too much bandwidth." The EFF went and spoke with Comcast and got the same story. However, with so many people reporting the same thing, some were wondering how truthful Comcast was. Now the Associated Press has done their own investigation (trying to transfer the Bible since it's in the public domain) and found that Comcast is clearly blocking the ability to upload completed files via BitTorrent, inserting a message to a computer trying to upload a file pretending to be from the downloading computer, telling it to stop sending. This seems to go against what Comcast originally said, though when the AP asked for a comment, Comcast subtly changed it's story. Rather than saying it doesn't look at applications or content, now it says: "Comcast does not block access to any applications, including BitTorrent." No, it doesn't block "access" but it does limit the functionality greatly (including perfectly legitimate uses of BitTorrent) without letting people know about it.
Associated Press Confirms That Comcast Blocks Some BitTorrent Traffic; Despite Comcast Denials
from the someone's-not-being-totally-honest-here... dept
Back in August, there was a report that Comcast was throttling certain types of BitTorrent traffic making it difficult to impossible to seed a download. In response, Comcast vehemently denied this was happening, despite many people saying they were experiencing it. Specifically, Comcast said: "the company doesn't actively look at the applications or content that its customers download over the network. But Comcast does reserve the right to cut off service to customers who abuse the network by using too much bandwidth." The EFF went and spoke with Comcast and got the same story. However, with so many people reporting the same thing, some were wondering how truthful Comcast was. Now the Associated Press has done their own investigation (trying to transfer the Bible since it's in the public domain) and found that Comcast is clearly blocking the ability to upload completed files via BitTorrent, inserting a message to a computer trying to upload a file pretending to be from the downloading computer, telling it to stop sending. This seems to go against what Comcast originally said, though when the AP asked for a comment, Comcast subtly changed it's story. Rather than saying it doesn't look at applications or content, now it says: "Comcast does not block access to any applications, including BitTorrent." No, it doesn't block "access" but it does limit the functionality greatly (including perfectly legitimate uses of BitTorrent) without letting people know about it.
Well......
From Techdirt . . . .
What Else Is Comcast Jamming? Gnutella? Lotus Notes?
from the might-help-to-be-a-little-transparent dept
After the AP confirmed that Comcast was clearly blocking some aspects of Bittorrent, Comcast continued to issue its oddly worded denial statement about how it doesn't specifically block access to any application or content. Of course, that can mean different things to different people, and as the EFF is discovering, perhaps Comcast is being half-truthful in saying it doesn't specifically pick on BitTorrent trafffic. However, that's only because it's doing similar kinds of blocking on other types of traffic, such as content using Gnutella or even Lotus Notes. The EFF has been running a variety of tests and has found that Comcast appears to send forged reset packets for Gnutella, and it points to someone else who found the same thing for Lotus Notes.
Of course, Comcast can do what it wants on its network, but to deny it and not be even remotely transparent about it is pretty questionable (and potentially a violation of FTC rules). Once again, this is the type of thing that wouldn't happen if there were true competition in the broadband market. If people knew that Comcast was arbitrarily cutting off what they could do on their network with no indication (and, actually, actively hiding the fact that they were doing so) many people would look for alternatives. The only problem is that there often aren't any alternatives. Even in the cases where there are, the alternatives often include one other player: a telco like AT&T who seems to be gearing up to do the same thing as Comcast in blocking certain types of content online. It really is a simple question, though: why won't Comcast tell its own customers what it's blocking? When you find out that the company is blocking completely legitimate applications and services with no recourse (or even information admitting it), it's really quite troublesome.
What Else Is Comcast Jamming? Gnutella? Lotus Notes?
from the might-help-to-be-a-little-transparent dept
After the AP confirmed that Comcast was clearly blocking some aspects of Bittorrent, Comcast continued to issue its oddly worded denial statement about how it doesn't specifically block access to any application or content. Of course, that can mean different things to different people, and as the EFF is discovering, perhaps Comcast is being half-truthful in saying it doesn't specifically pick on BitTorrent trafffic. However, that's only because it's doing similar kinds of blocking on other types of traffic, such as content using Gnutella or even Lotus Notes. The EFF has been running a variety of tests and has found that Comcast appears to send forged reset packets for Gnutella, and it points to someone else who found the same thing for Lotus Notes.
Of course, Comcast can do what it wants on its network, but to deny it and not be even remotely transparent about it is pretty questionable (and potentially a violation of FTC rules). Once again, this is the type of thing that wouldn't happen if there were true competition in the broadband market. If people knew that Comcast was arbitrarily cutting off what they could do on their network with no indication (and, actually, actively hiding the fact that they were doing so) many people would look for alternatives. The only problem is that there often aren't any alternatives. Even in the cases where there are, the alternatives often include one other player: a telco like AT&T who seems to be gearing up to do the same thing as Comcast in blocking certain types of content online. It really is a simple question, though: why won't Comcast tell its own customers what it's blocking? When you find out that the company is blocking completely legitimate applications and services with no recourse (or even information admitting it), it's really quite troublesome.
Smart. Obviously not in the U.S.
From Techdirt . . . .
How Embracing Piracy Jumpstarted Brazilian Music
from the oh-look-at-that... dept
One of the more amusingly wrong statements from the RIAA and its supporters is the idea that piracy is killing the music industry. Those who say that without being able to sell music there would be less music out there are flat out wrong, and we seem to see more proof of it every day. There's more music being produced today than ever before and it's often because of file sharing -- the very thing the industry honchos want you to believe is killing the industry. For natural experiments, we've pointed in the past to places like China and Jamaica. In China, where "piracy" is rampant, the music industry is thriving. Musicians have learned to use the piracy to help promote themselves so they can sell more concert tickets at higher prices. They also realized that companies would often pay for the creation of new music, so that it could be used to boost brand recognition of products. Meanwhile, in Jamaica, musicians competed to make better versions of songs, using the same "riddims," but adding their own singing over them. While in an RIAA-inspired world, the "riddim" creators would get upset, in Jamaica it's been great for them. The most popular riddims turn their creators into stars who are in high demand to create new riddims from musicians who are eager to be the first to create their own songs on top of the new riddims from the hottest riddim creators.
Now it looks like we can add Brazil to the list of natural examples. There, the tecnobrega music scene is on fire thanks to musicians embracing piracy. They don't just look the other way, they actively encourage it. Musicians burn their own CDs and rush them down to street vendors, begging them to sell them (without the musicians getting any cut at all). Those musicians also upload MP3s and email them to popular DJs who make mixtapes (similar to the US hiphop mixtape scene). Just like in China, the artists realize that they need to use so-called "piracy" to help them get more publicity. "Piracy is the way to get established and get your name out. There's no way to stop it, so we're using it to our advantage," according to one tecnobrega star, Gabi Amarantos. Contrary to what the RIAA and it supporters would tell you, the lack of copyright respect hasn't hurt the tecnobrega space at all -- it's made it explode. It's allowed many more musicians to make a decent living from music than via a traditional model and it means that much more technobrega music is being produced. In other words, all the stories about how a lack of copyright creates less music are, once again, provably wrong. Yet, of course, the RIAA and its supporters will continue to repeat the lie. In fact, the National Anti-Piracy Association in Brazil says that tecnobrega is a problem because it "makes light of piracy." It's not "making light" of piracy -- it's making money from piracy.
How Embracing Piracy Jumpstarted Brazilian Music
from the oh-look-at-that... dept
One of the more amusingly wrong statements from the RIAA and its supporters is the idea that piracy is killing the music industry. Those who say that without being able to sell music there would be less music out there are flat out wrong, and we seem to see more proof of it every day. There's more music being produced today than ever before and it's often because of file sharing -- the very thing the industry honchos want you to believe is killing the industry. For natural experiments, we've pointed in the past to places like China and Jamaica. In China, where "piracy" is rampant, the music industry is thriving. Musicians have learned to use the piracy to help promote themselves so they can sell more concert tickets at higher prices. They also realized that companies would often pay for the creation of new music, so that it could be used to boost brand recognition of products. Meanwhile, in Jamaica, musicians competed to make better versions of songs, using the same "riddims," but adding their own singing over them. While in an RIAA-inspired world, the "riddim" creators would get upset, in Jamaica it's been great for them. The most popular riddims turn their creators into stars who are in high demand to create new riddims from musicians who are eager to be the first to create their own songs on top of the new riddims from the hottest riddim creators.
Now it looks like we can add Brazil to the list of natural examples. There, the tecnobrega music scene is on fire thanks to musicians embracing piracy. They don't just look the other way, they actively encourage it. Musicians burn their own CDs and rush them down to street vendors, begging them to sell them (without the musicians getting any cut at all). Those musicians also upload MP3s and email them to popular DJs who make mixtapes (similar to the US hiphop mixtape scene). Just like in China, the artists realize that they need to use so-called "piracy" to help them get more publicity. "Piracy is the way to get established and get your name out. There's no way to stop it, so we're using it to our advantage," according to one tecnobrega star, Gabi Amarantos. Contrary to what the RIAA and it supporters would tell you, the lack of copyright respect hasn't hurt the tecnobrega space at all -- it's made it explode. It's allowed many more musicians to make a decent living from music than via a traditional model and it means that much more technobrega music is being produced. In other words, all the stories about how a lack of copyright creates less music are, once again, provably wrong. Yet, of course, the RIAA and its supporters will continue to repeat the lie. In fact, the National Anti-Piracy Association in Brazil says that tecnobrega is a problem because it "makes light of piracy." It's not "making light" of piracy -- it's making money from piracy.
Um. . . .not us
I don't understand it. Crooks used to be smarter.
From Techdirt . . . .
Comcast Still Dancing Around Its Content Jamming Operations; What's Wrong With Admitting It?
from the shhhh,-it's-a-secret-that-everyone-knows dept
With the news coming out that Comcast's broadband jamming operations actually interfere with other apps as well, Comcast is now trying to respond to the complaints in every way other than telling people what it is that they're doing, which at this point really does appear to be the only sensible response. Comcast went to Reuters (since it was AP who confirmed the original story) and repeated the carefully worded claim that Comcast is not blocking any kind of traffic. Of course, people aren't saying that it's completely blocking any traffic -- just that it's quietly pulling some background tricks to slow down certain types of traffic without letting its customers know. That's the key part, and it's the same complaint that people have had for years with Comcast concerning its fuzzy bandwidth caps. The company advertises unlimited service, but if it's not unlimited, why not come out and explain what the limitations are? It seems only fair.
Perhaps an answer comes from Tim Lee, who was invited to a conference call today with Comcast to help "clear up" the misperceptions Comcast feels are being spread in the media about its actions. The only problem is that Comcast doesn't clear up anything. It basically admits to the traffic shaping but says it can't tell people that it's doing that, as it could help them get around the shaping. Well, sorry, too late for that. Besides, what's wrong with simply telling people what the limitations are and then going after the violators for terms of service breaches? In being so secretive and misleading about it, all it's doing is causing many more people to get upset with Comcast and think that they're being targeted (even if they're not). It's a ridiculous PR situation for Comcast to be in -- and it could be solved easily enough if Comcast stopped beating around the bush, stopped giving gobbledy-gook doublespeak responses that don't actually answer the questions people are asking and simply told people what they're doing and why. It really is that simple. If the company has a legitimate reason for doing what it's doing (and some people say there is) then why not explain that?
From Techdirt . . . .
Comcast Still Dancing Around Its Content Jamming Operations; What's Wrong With Admitting It?
from the shhhh,-it's-a-secret-that-everyone-knows dept
With the news coming out that Comcast's broadband jamming operations actually interfere with other apps as well, Comcast is now trying to respond to the complaints in every way other than telling people what it is that they're doing, which at this point really does appear to be the only sensible response. Comcast went to Reuters (since it was AP who confirmed the original story) and repeated the carefully worded claim that Comcast is not blocking any kind of traffic. Of course, people aren't saying that it's completely blocking any traffic -- just that it's quietly pulling some background tricks to slow down certain types of traffic without letting its customers know. That's the key part, and it's the same complaint that people have had for years with Comcast concerning its fuzzy bandwidth caps. The company advertises unlimited service, but if it's not unlimited, why not come out and explain what the limitations are? It seems only fair.
Perhaps an answer comes from Tim Lee, who was invited to a conference call today with Comcast to help "clear up" the misperceptions Comcast feels are being spread in the media about its actions. The only problem is that Comcast doesn't clear up anything. It basically admits to the traffic shaping but says it can't tell people that it's doing that, as it could help them get around the shaping. Well, sorry, too late for that. Besides, what's wrong with simply telling people what the limitations are and then going after the violators for terms of service breaches? In being so secretive and misleading about it, all it's doing is causing many more people to get upset with Comcast and think that they're being targeted (even if they're not). It's a ridiculous PR situation for Comcast to be in -- and it could be solved easily enough if Comcast stopped beating around the bush, stopped giving gobbledy-gook doublespeak responses that don't actually answer the questions people are asking and simply told people what they're doing and why. It really is that simple. If the company has a legitimate reason for doing what it's doing (and some people say there is) then why not explain that?
Think tank: More broadband regulation may be needed
From Benton . . . .
Think tank: More broadband regulation may be needed
Information Technology and Innovation Foundation president says higher speeds and lower prices for broadband won't develop without government help
By Grant Gross, IDG News Service
Competition may not fix problems with broadband speed and cost in the United States, because of the high cost of entry into the market, the leader of a technology think tank said Friday.
Many policymakers in Washington, D.C., call for competition to cure issues with broadband value and build-out, but they don't recognize that the cost of building out competing networks may make broadband a natural monopoly or duopoly, said Robert Atkinson, president of the Information Technology and Innovation Foundation (ITIF).
"It's a mistake for policymakers to assume that if they simply 'push the competition lever,' all the problems with broadband policy will be solved," wrote Atkinson, in an ITIF paper. "The bottom line is that if policymakers want to maximize not only societal welfare but also consumer welfare, they must balance the push for more competition with the need to maintain and create an efficient broadband industry structure."
Atkinson and some other speakers at an ITIF broadband policy forum argued that the U.S. may need more broadband regulations to achieve higher speeds and lower prices. Atkinson suggested a balance between competition and stronger enforcement of consumer protection and antitrust laws. Another option would be to mandate open pipes, but Atkinson said that type of regulation isn't appropriate in the U.S. right now.
Not everyone agreed that more regulation was appropriate. The suggestion that broadband is a natural monopoly or duopoly "as an economist gives me the willies," said John Mayo, professor of economics, business and public policy at Georgetown University.
A government-supported monopoly in the traditional telephone market didn't work, Mayo said. He recalled an old Bell Atlantic billboard saying something to the effect of, "We don't sell you what you think you want; we sell you what we know you need."
Broadband is still a relatively new technology and the broadband business model is still evolving, Mayo said. The industry doesn't need government regulation while it's still developing.
Other speakers complained that U.S. residents get lower speeds for higher prices than many residents of Europe and the Far East. But Mayo noted that prices have been falling. "No matter how you measure it ... it's more affordable today than it's ever been," he said.
Speakers at the forum noted that broadband policy is becoming an issue in the U.S. presidential campaign. This month, Sen. Hillary Clinton, the Democratic presidential front-runner, outlined a broadband policy that would include tax incentives for broadband carriers to move into rural and other underserved areas. Clinton also called for public and private partnerships to help roll out broadband and for the U.S. Federal Communications Commission to develop better data about where broadband is available.
Several other candidates have talked about broadband as well, including Republican front-runner Rudy Giuliani, noted Jonathan Sallet, a partner in the Washington communications firm, the Glover Park Group.
But many policymakers in Washington have recently taken a hands-off approach to broadband, thinking "let's create a neutral platform and just let stuff happen," added Steven Weber, a professor of political science at the University of California Berkeley. But just letting stuff happen isn't working to push broadband in many sectors, including health care, he said.
"I don't think that argument is completely adequate to most people," he said.
Correction: Due to a reporting error, this story as originally posted contained incorrect information regarding broadband regulation options presented by a policymaker. The article was amended on Oct. 22, 2007.
The Role of Competition in a National Broadband Policy
By Robert D. Atkinson
October 2007
Read the full text of this report (PDF)
There is perhaps no issue more central to the debate about broadband policy than the state of and role of competition. Indeed, the issue of competition drives many of the debates over broadband, including net neutrality, wireless spectrum auctions, municipal broadband, and unbundling proposals. Although some advocates claim that the current state of broadband competition is more than adequate, others decry market conditions and seek proactive public policies to spur more competition. Yet almost everyone involved in broadband policy in the United States agrees that regardless of the current state of competition, more competition is better. The stated reason is that more competition leads to lower prices, higher speeds, broader deployment, more innovation, and better customer service.
Yet, the Washington consensus in favor of more broadband competition ignores the fact that broadband displays natural monopoly or duopoly characteristics. Because of the nature of the broadband industry, there are significant tradeoffs between more competition and goals of efficiency, innovation, low prices, and higher speeds and broader deployment. Thus, it’s a mistake for policymakers to assume that if they simply “push the competition lever,” all the problems with broadband policy will be solved. Some problems will recede, but others are likely to emerge. The bottom line is that if policymakers want to maximize not only societal welfare but also consumer welfare, they must balance the push for more competition with the need to maintain and create an efficient broadband industry structure.
This paper starts by reviewing the affordability of broadband in the United States. It then postulates two starkly different views toward broadband competition: the “engineers’ view” and the “economists’ view.” Finally, it reviews the four main policy options toward broadband competition: 1) keep the same number of “pipes”; 2) spur the deployment of more pipes; 3) force incumbents to open up existing pipes to competitors, and 4) regulate “duopoly” pipes. Although each policy track will achieve some benefits, each also brings with it costs and risks. Policymakers need to balance the desire for more competition to enhance consumer welfare in the broadband realm with the need for the most efficient broadband industry structure.
Read the full text of this report (PDF)
Think tank: More broadband regulation may be needed
Information Technology and Innovation Foundation president says higher speeds and lower prices for broadband won't develop without government help
By Grant Gross, IDG News Service
Competition may not fix problems with broadband speed and cost in the United States, because of the high cost of entry into the market, the leader of a technology think tank said Friday.
Many policymakers in Washington, D.C., call for competition to cure issues with broadband value and build-out, but they don't recognize that the cost of building out competing networks may make broadband a natural monopoly or duopoly, said Robert Atkinson, president of the Information Technology and Innovation Foundation (ITIF).
"It's a mistake for policymakers to assume that if they simply 'push the competition lever,' all the problems with broadband policy will be solved," wrote Atkinson, in an ITIF paper. "The bottom line is that if policymakers want to maximize not only societal welfare but also consumer welfare, they must balance the push for more competition with the need to maintain and create an efficient broadband industry structure."
Atkinson and some other speakers at an ITIF broadband policy forum argued that the U.S. may need more broadband regulations to achieve higher speeds and lower prices. Atkinson suggested a balance between competition and stronger enforcement of consumer protection and antitrust laws. Another option would be to mandate open pipes, but Atkinson said that type of regulation isn't appropriate in the U.S. right now.
Not everyone agreed that more regulation was appropriate. The suggestion that broadband is a natural monopoly or duopoly "as an economist gives me the willies," said John Mayo, professor of economics, business and public policy at Georgetown University.
A government-supported monopoly in the traditional telephone market didn't work, Mayo said. He recalled an old Bell Atlantic billboard saying something to the effect of, "We don't sell you what you think you want; we sell you what we know you need."
Broadband is still a relatively new technology and the broadband business model is still evolving, Mayo said. The industry doesn't need government regulation while it's still developing.
Other speakers complained that U.S. residents get lower speeds for higher prices than many residents of Europe and the Far East. But Mayo noted that prices have been falling. "No matter how you measure it ... it's more affordable today than it's ever been," he said.
Speakers at the forum noted that broadband policy is becoming an issue in the U.S. presidential campaign. This month, Sen. Hillary Clinton, the Democratic presidential front-runner, outlined a broadband policy that would include tax incentives for broadband carriers to move into rural and other underserved areas. Clinton also called for public and private partnerships to help roll out broadband and for the U.S. Federal Communications Commission to develop better data about where broadband is available.
Several other candidates have talked about broadband as well, including Republican front-runner Rudy Giuliani, noted Jonathan Sallet, a partner in the Washington communications firm, the Glover Park Group.
But many policymakers in Washington have recently taken a hands-off approach to broadband, thinking "let's create a neutral platform and just let stuff happen," added Steven Weber, a professor of political science at the University of California Berkeley. But just letting stuff happen isn't working to push broadband in many sectors, including health care, he said.
"I don't think that argument is completely adequate to most people," he said.
Correction: Due to a reporting error, this story as originally posted contained incorrect information regarding broadband regulation options presented by a policymaker. The article was amended on Oct. 22, 2007.
The Role of Competition in a National Broadband Policy
By Robert D. Atkinson
October 2007
Read the full text of this report (PDF)
There is perhaps no issue more central to the debate about broadband policy than the state of and role of competition. Indeed, the issue of competition drives many of the debates over broadband, including net neutrality, wireless spectrum auctions, municipal broadband, and unbundling proposals. Although some advocates claim that the current state of broadband competition is more than adequate, others decry market conditions and seek proactive public policies to spur more competition. Yet almost everyone involved in broadband policy in the United States agrees that regardless of the current state of competition, more competition is better. The stated reason is that more competition leads to lower prices, higher speeds, broader deployment, more innovation, and better customer service.
Yet, the Washington consensus in favor of more broadband competition ignores the fact that broadband displays natural monopoly or duopoly characteristics. Because of the nature of the broadband industry, there are significant tradeoffs between more competition and goals of efficiency, innovation, low prices, and higher speeds and broader deployment. Thus, it’s a mistake for policymakers to assume that if they simply “push the competition lever,” all the problems with broadband policy will be solved. Some problems will recede, but others are likely to emerge. The bottom line is that if policymakers want to maximize not only societal welfare but also consumer welfare, they must balance the push for more competition with the need to maintain and create an efficient broadband industry structure.
This paper starts by reviewing the affordability of broadband in the United States. It then postulates two starkly different views toward broadband competition: the “engineers’ view” and the “economists’ view.” Finally, it reviews the four main policy options toward broadband competition: 1) keep the same number of “pipes”; 2) spur the deployment of more pipes; 3) force incumbents to open up existing pipes to competitors, and 4) regulate “duopoly” pipes. Although each policy track will achieve some benefits, each also brings with it costs and risks. Policymakers need to balance the desire for more competition to enhance consumer welfare in the broadband realm with the need for the most efficient broadband industry structure.
Read the full text of this report (PDF)
Web 2.0 Summit: U.S. Becoming Less Relevant In Global, Internet Economy
From Benton . . . .
Web 2.0 Summit: U.S. Becoming Less Relevant In Global, Internet Economy
The U.S. share of the global gross domestic product has declined steadily since 1999 to 19% today from 22%, according to Morgan Stanley research.
By Antone Gonsalves
InformationWeek
The United States is losing its clout in the global economy and the Internet as other countries develop faster growing markets, a financial analyst said Thursday at the Web 2.0 Summit.
In a speech on technology trends, Mary Meeker, managing director of Morgan Stanley's global technology research team, said the U.S. has become less relevant over the years to the global economy.
The U.S. share of the global gross domestic product has declined steadily since 1999 to 19% today from 22%. While this has been good news for other countries, it hasn't been a favorable trend for the U.S.
"The good news for the global economy is we're less relevant, the bad news is we're less relevant," Meeker said.
Going forward within the U.S., the country's current woes related to the subprime mortgage market "should not be underestimated" and it could have a serious impact on the U.S. GDP.
In terms of the Internet -- especially in technologies key to Web 2.0 success -- the fastest growth is in non-U.S. markets. For example, Germany leads the e-commerce market, China leads in online gaming, South Korea leads in broadband, Japan leads in mobile payments, the United Kingdom leads in online advertising, Brazil and South Korea lead in social networking, and the Philippines leads in micro-transactions via SMS.
America is not totally out of the picture. Online advertising is growing at a healthy clip in the U.S., growing 26% this year to 10% of the total ad market, or $21 billion, Meeker said. The total U.S. advertising market this year is expected to grow by 4%. By 2012, online advertising is expected to make up 17% of the total ad spend in the U.S.
As to the growing importance of new Internet companies, Meeker pointed to the number of social networks and other Web 2.0 properties that weren't in the top 10 rankings in terms of traffic in 2005, but are this year. Those companies include YouTube, No. 4; Live.com, No. 5; Facebook.com, No. 7; Orkut.com, No. 8; Wikipedia.org, No. 9; and Hi5.com, No. 10, according to Alexa Global Traffic Rankings.
Meeker's presentation is available online.
Web 2.0 Summit: U.S. Becoming Less Relevant In Global, Internet Economy
The U.S. share of the global gross domestic product has declined steadily since 1999 to 19% today from 22%, according to Morgan Stanley research.
By Antone Gonsalves
InformationWeek
The United States is losing its clout in the global economy and the Internet as other countries develop faster growing markets, a financial analyst said Thursday at the Web 2.0 Summit.
In a speech on technology trends, Mary Meeker, managing director of Morgan Stanley's global technology research team, said the U.S. has become less relevant over the years to the global economy.
The U.S. share of the global gross domestic product has declined steadily since 1999 to 19% today from 22%. While this has been good news for other countries, it hasn't been a favorable trend for the U.S.
"The good news for the global economy is we're less relevant, the bad news is we're less relevant," Meeker said.
Going forward within the U.S., the country's current woes related to the subprime mortgage market "should not be underestimated" and it could have a serious impact on the U.S. GDP.
In terms of the Internet -- especially in technologies key to Web 2.0 success -- the fastest growth is in non-U.S. markets. For example, Germany leads the e-commerce market, China leads in online gaming, South Korea leads in broadband, Japan leads in mobile payments, the United Kingdom leads in online advertising, Brazil and South Korea lead in social networking, and the Philippines leads in micro-transactions via SMS.
America is not totally out of the picture. Online advertising is growing at a healthy clip in the U.S., growing 26% this year to 10% of the total ad market, or $21 billion, Meeker said. The total U.S. advertising market this year is expected to grow by 4%. By 2012, online advertising is expected to make up 17% of the total ad spend in the U.S.
As to the growing importance of new Internet companies, Meeker pointed to the number of social networks and other Web 2.0 properties that weren't in the top 10 rankings in terms of traffic in 2005, but are this year. Those companies include YouTube, No. 4; Live.com, No. 5; Facebook.com, No. 7; Orkut.com, No. 8; Wikipedia.org, No. 9; and Hi5.com, No. 10, according to Alexa Global Traffic Rankings.
Meeker's presentation is available online.
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