Dana Blankenhorn

One Word for Broadband Stimulus

Congress is looking at putting anywhere from $6-9 billion into broadband as part of the stimulus bill.

Not what advocates like Free Press want. (They were looking at more like $44 billion.) But a lot more than I was thinking of, namely, zero.

This is not to say I hate broadband. I love me some broadband, the broader the better. I just happen to think that competition is a better tool for getting it than any subsidy.

Which leads to  one word, the one word by which I will measure whether this is money down a rathole or something significant.

Internet.

Phone FUD Targets Google

It may be the first challenge to the new President's tech policy.

For the last several months advocates for the nation's phone monopolists have been ginning up a public relations campaign against Google. They claim it's a monopolist. They claim it's a threat to freedom, a violator of privacy, evil.

It's being done in clever ways, through academics and think tanks you don't usually think of as Bell shills. Privacy advocates are being taken in, even the Electronic Frontier Foundation.

But it doesn't take a genius to see where all this is coming for, or where it's leading. All it takes is a little knowledge of the industry's history, a quick look at who stands to benefit, and a short Google of who's cheering from the sidelines.

Just read Scott Cleland's blog. Cleland, a notorious phone monopoly booster of long standing, has been hammering Google this year at every opportunity.

Google itself seems unable to understand the situation, or properly respond to it. CEO Eric Schmidt has tried to be personally charming. The company's other officials have sought to be transparent, and answer questions honestly.

Meanwhile, the stock market crash has hit Google hard. The company is now worth only about what Verizon is worth -- AT&T is now worth nearly twice that. And Google's stock valuation has begun tracking the phone giants. Suddenly it's no longer a growth stock.

How should Google respond? Aggressively. And it needs to understand who its opposition really is, the ruthlessness of that opposition, and the nature of the struggle.

It is a political struggle.

Ending the Duopoly

One interesting fact, told on CNBC this morning, is that while most people are very pessimistic about the current economy most think things will get better in the next year or so.

They will. That's because the present trends are pretty easy to reverse, and once reversed should stay that way. Simply placing a priority on the War Against Oil should enable U.S. demand to fall fairly dramatically. Insulation, grid improvements, and smaller cars driven somewhat less will force oil prices down in the fairly near term, if we are serious about it.

The same is true for the other big economic problem we have, the one no one really talks about. The telecom duopoly. Throughout this decade, just as the Bush Junta has given oil producers a stranglehold over our economy, so he has allowed telecom monopolists to be given the same stranglehold. This was done deliberately, to gain more control over the American people. With "one throat to choke" it's easy to get your demands for data satisfied, assuming you pay the bills. So a policy of fewer Internet providers was in the authoritarians' best interest.

It has been good for the telecoms'. As I've noted here many times, the price of "broadband" has remained stable for a decade, and its definition has not stretched one bit. This despite the improvements in equipment and technology of Moore's Law -- we now have efficient fiber switches, and fibers which can handle hundreds of streams of data at once.

The new way the monopolists seek to screw us is with bandwidth "caps," which have come into effect on all the major networks -- Comcast, Cox, and AT&T, in amazingly short order. This is indeed designed, as Om Malik notes, to force you into keeping your cable TV. While the nominal cost of cable broadband is $50/month it's only available with a viewing package in most areas, and that can come to $80/month or more, even if you're not using pay per view or a service like HBO. The phone company does the same thing. Their broadband also costs $50/month, but they nick you for another $50 (or more) for the phone line, and then add a long distance plan.

The result is that Americans are now paying about $120-150/month for 1.5 Mbps downloads which can only get video clips, while Europeans and Asians pay a fraction of that for lines which can do far more. Innovation is being throttled. It's hard to telecommute on such slow lines, especially if you're in a business where the movement of large files is commonplace. So winning the war against the telecom duopoly is a component in winning the War Against Oil.

Now, here's how we win it.

A Reason to Produce

Think of this as Volume 11, Number 21 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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All the economic problems of our time have a single root cause. (Cartoon by Thomas Nast, for Harper's Weekly.)

Whether we're talking about the Internet, about wireless technology, or about energy, the cause is a lack of reason to produce more.

Consider oil, only because it's top of mind. Why should OPEC produce more? Why should any other major producer? Why should these suppliers lift a finger to halt the thefts and corruption which keep oil from the market?

Will they make more money by doing this? No, they won't. Oil is at $130 per barrel and going higher. Add more supply and the price will go down.

The same is true for Internet service and wireless service. Why should the companies which control Internet broadband allow the creation of a "new pipe" in wireless? It would compete with their shared monopoly. Having kept prices for basic broadband at $50/month and higher, these monopolists are now moving to actually raise prices by limiting the number of bits they deliver under those contracts, and preventing the spread of competing technologies.

Why shouldn't they? What is their incentive for investing in their networks to increase the number of bits they deliver? Will they earn more money as a result? No, they won't.

The problem in all these cases is the same. Shared monopolies, or oligopolies. The free competition of capitalism naturally moves markets toward this climax state. Think Coke and Pepsi, or Bud and Miller, or WalMart and Target. A very small number of companies in each market control the bulk of supply, and are thus in a position to set prices. Why do you think it costs over $1 for a can of fizzy water?

While proclaiming the benefits of capitalism and competition, the United States government has been endorsing this principle of oligopoly for most of the last century, and that trend has accelerated during this decade. All that has really happened is that the oil producing nations of the world have figured this out and taken advantage.

So the answer to our economic doldrums is simple. We need to switch from giving people reasons to withhold product from the market and give them reasons to supply it.

The Buried Lede in the McCain-Lobbyist Story

I don't care if he shtupped her. I don't care if he saw her socially. I don't care about the why concerning anything he did. (Find the lobbyist on the page where this picture came from.)

This should not be about John McCain. It should not be about The New York Times.

This should be about us, all of us. Did John McCain serve us well, or serve us poorly?

The buried lede is John McCain's record, as chair of the Senate Commerce Committee, regarding telecommunications issues and media consolidation. The fact is he endorsed monopolization, every step of the way.

Why do you see no more local programming on your TeeVee? Why are all your radio stations canned and controlled in Corpus Christi? Why do you have, at most, two choices for Internet access? Why are your bills going up instead of down?

Media consolidation. And John McCain has endorsed it, enabled it, for a decade now. The why or how is really immaterial.

The Difference Among Democrats

Think of this as Volume 11, Number 2 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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The difference among Democrats is subtle -- perhaps too subtle for TV to catch.

But it's there.

I've compared Hillary Clinton to Richard Nixon before, the key to that comparison being her role in the AntiThesis to Nixon's Thesis, which still governs America in 2008, and the ruthlessness which many Democrats, as a result, see as her strength. I've also talked about Barack Obama's comparison to Reagan and my love for John Edwards.

Edwards' star is fading fast, unfortunately. His populism is drawing people like me, those accused of wealth and guilty of education, but failing among its target audience, those with lower-middle incomes. Democrats in that group are going to Clinton, while Huckabee does well if they're Republican. Edwards is left with the "limousine liberals," those who know history. I have compared him here to FDR and to those of lower income that's all FDR is -- history.

What the media does -- and it wants to do this at an accelerating pace regardless of who it hurts -- is winnow down the field quickly. It does this with the early primaries. Single digits in Iowa and you're out. And after New Hampshire they want a two-man game in each party. Thus Fred Thompson and Giuliani have been dismissed, with Romney given the task of "Michigan-or-bust." And on the Democratic side, Edwards is considered gone.

We're left with Obama and Clinton, and the real issue, which is similar to what Republicans faced early in the last generation when the battle was between Reagan and Gerald Ford.

That is a choice between the new values and the old interest groups.

It's 1938 Over Here

I often decry the call of "Munich" on foreign policy. It's not 1938. Our foreign enemies are not Hitler. They don't have his kind of power, and don't pose his kind of threat.

But domestically, it has been 1938 in this country for a long time, and most Democrats have been Neville Chamberlain before it.

They constantly assume goodwill toward democracy, and to the basic rights of a free society, which Bush, Cheney, and their whole crowd do not share. The Administration uses this assumption of goodwill against them in ways large and small, in their ruthless campaign for absolute power -- not just political power, but personal power, financial power, and judicial power.

It's only the DFHs of the Netroots, the ones called "extreme" by the mainstream press, who are playing Churchill here. They seem easy to dismiss. In the short run, they are. If these people had realized earlier this year they were, in fact, the majority, as they claimed they were, they wouldn't be in this mess.

But let me leave the financial scandals, the power grabs, the planetary destruction and the sick foreign policy for a moment. Let's talk about this in terms of something I know well, the Internet.

The Last Big Endorsement

The fall has been a series of non-endorsements, sort of like the college football season:

• The Netroots primary delivered no endorsement. Edwards leads, but his lead over Barack Obama is so small as to be meaningless.
• Al Gore never made an endorsement. His embrace of Wall Street and Silicon Valley has been so complete he's practically a Republican.

There is one very important endorsement that still might happen, and which could prove decisive.

  The Google Endorsement.

I'm not talking here of some appearance by Eric Schmidt, who has hosted the company's talks with candidates at the company offices. (Ron Paul's interview drew the most interest.) I'm talking about an endorsement by founders Larry Page and/or Sergey Brin.

Such an endorsement would be powerful far beyond the money involved. Because it would be based on Internet Values.

This Week's Clue: Liberate Moore's Law

Following is the essay you can designate as Volume 10, Number 48 of This Week's Clue, based on the e-mail newsletter I have produced since March, 1997. It would be the issue of December 3.

Enjoy.

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When this newsletter launched in 1997 it was called A Clue...to Internet Commerce.

As Internet Commerce became commerce, and as the process of doing business online became standardized, I began looking at other areas to cover and settled upon Moore's Law.

At the start of this decade Moore's Law was racing along on every front, and it seemed there was no way to stop it. So I wrote in my 2002 book. (That's it to the right. The beard is whiter now, but I still have the suit and it fits.)
 

I was wrong. There was a force that could stop many elements of Moore's Law in their tracks.

Politics.

All the People, All the Time

You of course know that famous Abraham Lincoln quote:

"You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time."

To this we must add the George W. Bush corollary:

"If you fool half of the people once in a while that's good enough."

Bush didn't really give us that second quote. That's just the lesson his Administration taught us. And it's a lesson the Right has been systematically teaching for decades now. It's the dark heart of the Nixon Thesis.

Reporters are actually easy to fool. If it's a thick report with a cover page we'll generally repeat what's on the cover page. Easier still, if the boss says "do it this way" that's how it's done. Or they'll find someone else.

The policy debates of this entire last generation were turned into kabuki dances this way. Corporate-funded think tanks replaced independent universities informing Congress. The whole game is so institutionalized now no one even remarks upon it. In fact one of the main goals of the Netroots is to get "our own" think tanks, which will say what we want to hear.

The result is everything becomes Astroturf, and no one really knows anything. The think tanks do as they're told, the policy makers do as the think tanks tell them, and the people funding it all may just be acting on rank prejudice -- or self-interest.

It's the last which is most dangerous to the medium you're now reading, because this process has been adopted by major corporations, and by no corporation so much as the new AT&T.