Dana Blankenhorn

What We Are Losing

America's failure to deliver broadband -- a failure that has become absolute due to the Bell-cable duopoly -- also means the end of America's capability to innovate.

This was made clear to me recently by Ronald Baron Yokubaitis, who has been fighting (unsuccessfully) on behalf of competition for a decade.

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Innovation lost or gone abroad, is one of our talking points when we make the rounds in Austin or Washington. Name one innovative new Internet business started by a Bell or Cable Co.? Skype? Fon?  Correro.de? NIH (not invented here).

The kids now growing up in Asia and the EU on 20-100Mbps, and even some on Gig-E, WILL interact in this broadband frontier and create the new applications that we Americans will be using, not NIH. While our 1-4 Mbps asymmetrical leftovers from IPTV's 16-18 Mbps will look like
dial up in three years.

We need our wide open "Wild West" of open Internet to get back in the game, rather than the "Back East" regime foisted on us that we fled. Internet Application Providers are global and stateless and might as well start acting that way. Which State (s) environment provides the better platform to operate? U.S? Netherlands? Hong Kong? You can't ignore the US, but it is losing in importance. Innovation driven off shore.

Major Reform Afoot?

Sascha Meinrath (left) reports on two bills, just introduced, that could break the deadlock of Infrastructure (or Information, or Digital Futures) Held Hostage by encouraging the development of community WiFi networks.

The full post is here.

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Major reform is afoot!

Two bills were introduced on Friday that would radically improve unlicensed wireless access.  Both bills would greatly improve the general public’s access to the public airwaves. 

The first bill, “The Wireless Innovation Act of 2006,” is a major bi-partisan effort to line up Senators to support Community Wireless.

The second, “The American Broadband for Communities Act,” is led by Republican Senator Stevens and does much the same.

While many will argue that the two bills don’t go far enough, they are a giant leap (not a baby step)
forward towards reforming spectrum policies to make more efficient use of computer technology.  I don’t know if the drafts are public yet, but will post the texts once I get confirmation.

So Why Say Infrastructure?

Here is why Bob Frankston says Infrastructure Held Hostage is the best description of what we're talking about:

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You are connected if

... You are talking a walk and have a heart attack and don't have to walk home to dial 911

... You aren't captive to you cellular carrier.

... You have a million TV "channels"

... You can watch TV from Australia just like you can read a newspaper
from there (bad example in oz). What makes this strange is that we now take
it for granted that you can read the newspapers ...

... You don't have to beg plead whine with to get a phone company to do
you favors.

... Your taxes go down because you aren't pay for redundant services.

... You can start a business anywhere

... For the US -- you can compete with Bangalore.

... For Bangalore -- oh, they're already connected ... never mind

... You can ask your Sherpa for the weather report within

Bells Hold Digital Future Hostage

Recently members of our list have been having a discussion over what we should call ourselves in order to make ourselves better understood by the general public.

The term "Infrastructure Held Hostage" sounds obscure, some feel. What about "Information Held Hostage?" Bob Frankston notes that this takes us back 10 years, to the "Information Superhighway." It's the pipes that pass information, the infrastructure, that's being held, he asserts. And there's a strong case to be made for that.

After many notes were exchanged, veteran entrepreneur Jeffrey Sterling of IXA offered the following, and it's posted here with his permission:

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What they are holding hostage is the infrastructure. What it is affecting is our "digital future".

Bruce, I'm glad you said it so I wouldn't have to be the first one. I was thinking "digital future" too. Or perhaps our "digital economy". But I'm afraid we are jumping ahead of the general public.

When all is said and done, I defer to Gordon of course, but today the end game is open infrastructure. However we get there, that is the goal.

From that flows our new information/digital future/economy.

I'm as tired of this old fight as many of you must be, but until we've got an open infrastructure platform we can count on for generations to come, we've got to stick to the knitting.

-Jeff

Network Neutrality and an Internet with Vision

Andy Oram of O'Reilly Media wrote the following for LX'er. It is cross-posted here with permission from the author.

Read the full story.

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The rhetoric is whipping through the air in Washington and racing at a dizzying pace across the Internet, as highly publicized hearings on a "network neutrality" bill were held on February 7. Vint Cerf testified that the issue would determine "the future of the Internet." In opposing the bill, the incumbent Bell telephone companies suggest that without their paternal care, the Internet doesn't have a future in this country.

The target of the bill (introduced by Senator Ron Wyden, D-Oregon) is recently-aired plans by telephone companies, which I reviewed a few weeks ago, to be decidedly non-neutral on how they deliver Internet traffic. Content providers willing to pay extra would get their content delivered at a higher bandwidth.

While it's easy to wax indignant over telephone companies' presumptuousness in deciding what packets should travel at what times, it's harder to step back and take in the economic issues driving the proposed change. And there are technical questions about it as well. All of which I'll try to cover in this article.

The Bells are Sneaky Bastards

The Bells are agressively attacking our core-principles. We lose ground every day.

The Bells are well funded, sneaky bastards...

 

The reason we didn't win  ---we've been  unable to engage the other groups enough to take actions---- and we didn't have the resources to play at their level, or even build coalitions. They may be sympathic, but not engaged.

 

I'm not talking about G but about all those who cared more about the "media" or "internet" issues than the "telco" issues. This is not their fault, we failed to enlighten them on what was coming....

 

We tried, but it wasn't until Whitacre's remarks and the Bells new path (since they also own the backbones and like fools everyone let the AT&T and MCI deals through)  that most groups suddenly 'groked' that there was even a problem.

 

We tried for the last 6 years to stop the evil empire and guess what --- Darth Vadar won these last rounds...

 

Now, you could argue that this was an inevitable outcome,... that you can't win. However, then, that would mean that all of the current bell activities should simply go forward -- we lose.

 

Again the Bells are agressively attacking our core-principles. And they are well funded, sneaky bastards...

 

Let's see, we have: 

• Consumers for Cable Choice -- get franchises and stop munis
• Keep USF Fair --  put taxes on VOIP and raise USF
• TRAC --- to stop VOIP (destroyed LD)
• APT -- to make sure that the Bells keep exclusive use of the phone networks.
• New Millennium Research  -- to do biased reasearch about the munis, ISPs, telco competition.
• Progress and Freedom Foundation--- write new pieces of legislation to harm munis, stop competition, open franchises.
• Issue Dynamics -- coordinates the groups and runs the skunkworks.
• Others -- Brookings, Cato, Heartland, USIIA....
•  

There's  also 150 different  co-opted groups like NAACP, National Consumer League, Latino, Hispanic, Disabled, etc. Seniors, all out to screw us... and all smiling and all funded by the Bells.

 

Roland Cole on the Information Superhighway

Roland Cole has, in addition to his work with the Software Patent Institute, now taken on the role of Director of Technology Policy for the Sagamore Institute for Policy Research

He writes, "SIPR  is a national think tank based in Indianapolis. I will be working very hard on federal, state, and local policy towards technologies such as broadband, alternative energy, nanotechnology, and life sciences.

I will be working to launch initiatives in three areas:

1. Think tank projects concerning technology policy (studies, conferences, etc.);
2. Adding technology issues to existing projects, such as the work SIPR is already doing in workforce development, higher education, et al.; and
3. Helping SIPR be "state-of-the-art" in its own research technology - document management, collaboration, outreach (email, video conferences, etc.).

SIPR receives funding from a variety of sources, primarily foundations, that range across a broad range of the political spectrum, and prides itself on being "independent" from all of them.

In light of that, some thoughts summarizing how to think about solutions to the current "last mile" problem.

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It strikes me that the Highway Trust Fund comes closest to a funding model that would promote most of the goals we are seeking.

What This Means For VOIP?

The following is cross-posted at Jeff Pulver's blog,  Pulver.Com.

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First, I'd like to thank Jeff and Jonathan for the opportunity to make this wake up call.

Will VOIP be killed off as a stand alone service? The trends are all there to make it happen. From the fake astroturf consumer groups trying to add Universal Service and taxes and surcharges, or the Bell companies being able to bundle their services through massive 'cross-subsidization', i.e., customer funding of the Bell companies' own DSL and long distance businesses, how will VOIP survive?

But it's a lot worse than that. -- "We own the pipes" Ed Whitacre of SBC exclaims. BellSouth now claims that they can give themselves better treatment or charge companies for the privilege, while Verizon is calling for an end to Google's 'free lunch'.

Even Senator Ensign quoted herein, "We don't have the financial incentives for networks being built."

This is all hogwash. America is 16th in broadband and falling. Our current services are inferior to Korea and Japan who are delivering bi-directional 100 Mbps services for $40 bucks. (FIOS is 30 mbps top speed at $199.)

But worse --- You were lied to. That's right. You see, customers funded fiber optic networks they never received, to the tune of $2000 per household -- about $200 billion. By 2006, 86 million households should have had a fiber optic based service capable of 45 Mbps in bi-directions, that could handle over 500 channels of programming.

Let's put some facts out there for all to see:

SBC, Verizon, BellSouth and Qwest, starting in the early 1990's, went state to state, promising to rewire the state if only regulations were changed to give them massive financial incentives. (it varies by state.) For example, by 2010, the entire state of New Jersey was to be rewired. Don't believe me? Here's a link to a page from the original Order. http://www.newnetworks.com/OpportunityNewJerseyFiber.htm

This is not DSL, an inferior service over the old copper wiring that was considered inferior by the Bells in 1991. This is not FIOS or Lightspeed, which are crippled networks. These are not bi-directional, they can't handle 45 Mbps and the IPTV video still doesn't work --- and they are closed to competitors.

New Jersey wasn't the only state scammed. Virtually every state in America was to be fiberized. California was to have 5.5 million homes by 2000. Here's the information directly from Pac Bell about its wiring plans. http://www.newnetworks.com/cabroadbandpacbell.htm

Bell Atlantic promised to have Philadelphia and Pittsburgh Pennsylvania by 1997 with fiber to the curb, 12 million homes by the end of the decade. Here's a 1996 Bell Atlantic press release.

No wonder Philadelphia has been fighting to do Wifi--- Verizon didn't deliver.

In fact, the phone companies filed with the FCC to do video dialtone, --- cable competition using the phone lines. ---- in 43 different cities/states by 1997. 9.7 million homes were to be wired.

http://www.newnetworks.com/videodialtonedeployment.htm

And most importantly -- these networks, directly subsidized by customers, were OPEN to competition. In fact, state laws all required that the wiring be ubiquitous in rural, urban and suburban areas, rich and poor equally. Customers gave money to a contractor to build a highway, and they didn't do it. More to the point, now the contractor wants to decide who gets the highway and put up their own toll roads.

Here's what happened to California -- SBC pulled the plug, even though laws were changed based on the state commitments.

Ironically, the phone companies were also supposed to compete with each other in the other regions. It was the basis for the SBC-Ameritech and Bell Atlantic GTE mergers. Here's the 30 cities SBC said it would compete in by 2001. http://newnetworks.com/SBCfailedcities.html

What happened was collective Amnesia. Virtually no one seems to remember that they have been paying SBC, Verizon BellSouth an Qwest for over a decade for fiber optic networks they never received.

But the documentation is clear. We decided to put the data in a new ebook: (shameless plug.) Check out the story in detail or read the chapters on New Jersey of how SBC and Verizon killed off the fiber optic networks in 26 states. We estimate that $200 billion in excessive phone rates and tax perks were paid, with nothing to show for it. http://www.newnetworks.com/broadbandscandals.htm

There's also a blogging community to talk about the issues: http://200billionscandal.typepad.com/

The dark secret? They couldn't build the networks in 1992, much less 2006, not at the costs they had quoted. We in fact filed with the FTC over this issue of fraud. http://www.newnetworks.com/FTCcomplaintSBCVerizon.htm

But let me address a few more issues.

Fake Consumer Groups controlling VOIP's destiny.

First, fake consumer groups, biased research firms, paid off politicians and lots of lobbying dollars are going into killing off VOIP. We've filed complaints with the FCC

http://www.teletruth.org/USF.html

"Keep Universal Service Fair Coalition" is another Bell (SBC, Verizon and BellSouth?) skunkworks campaign. The group is mainly comprised of astroturf and co-opted groups funded by the Bell companies and are being coordinated by Issue Dynamics

and Sam Simon, to push the Bell monopoly agenda. In this case, this group is pushing an anti-customer position on the Universal Service Fund -- Raise this tax and put it on new services, including VOIP. This group includes TRAC, Alliance For Public Technology, American Association of People with Disabilities, World Institute on Disability, League of United Latin American Citizens, and the Gray Panther, among others.

See: http://www.newnetworks.com/skunkworks101.html

Using co-opted and astro-turf groups, over the last decade they have taken away your voice at the FCC, in Congress, and in the media, harming everything from broadband and the Internet, the wiring of municipalities, the offering of innovative services, such as VOIP, to increasing the charges on your phone bill and harming competition. Instead of adding Universal Service to VOIP, the real question should be why are we subsidizing very wealthy phone companies at the expense of low income, seniors etc, and these consumer's are backing policies harmful to their own constituents.

Do you think it was a coincidence that there is also a group called the "VOIP coalition", with almost same members, who supported putting E911 on VOIP?, and funded directly by the Bell companies? http://www.apt.org/voip/

(And don't get me started about how direct revenue to the phone companies is hidden in the taxes and surcharges section of the phone bills. Teletruth's auditing services have help to create two class action suits for overcharging in New Jersey, and we've only scratched the surface of phone bill taxation.) http://www.teletruth.org/phonebillindependencereport.html

This astroturf issue is way more insidious than K Street lobbying and needs to be exposed. Wifi-Networking News has also done some investigations and found that these groups are working in concert to help close down municipalities from offering services.
http://wifinetnews.com/archives/cat_sock_puppets.html>

 

Where Do We Go From Here?

On the heels of The New York Times reviewing The $200 Billion Scandal, Bruce Kushnick describes some next steps:

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Over the last decade there's been a barage of anti-competitor behaviors and rulings by the FCC.

Line sharing, to be able to split the line for DSL, was taken away as was the reselling of of Bell's DSL service. The FCC also blocked the ISPs from cable networks. It then also screwed the CLECs buy getting rid of the obligation to unbundle their networks, UNE-P, which killed off most CLECs and got AT&T and MCI sold off. Finally, all new builds "greenfields", were given to the Bells for exclusive use.  -- Therefore, FIOS, under the FCC"s rulings is not for ISPs to use, (or CLECs.)

So what should we focus on?

Getting back basic rights... The next action we're taking is this $5 billion dollar complaint in NJ based on the books data. ---

It says: Customers funded the networks, current and future. Therefore, under prior obligations of Opportunity New Jersey, any new fiber optic build will be subject to these obligations... If FIOS is just a decade late, then these networks would be open.

Our argument is that they have obligations to give ISPs and CLECs direct access to the fiber plant.
(or even video programmers, etc.)

I also argue that an FCC complaint about 'customer takings' by giving exclusive green field builds was a violation of subsidized committments for rewiring the state, which was open...

VOIP  --- since many ISPs sell VOIP, it's clear that making sure illegal bunling of products does not occur.

As us telecomers know, the Bells were allowed into long distance because they were
first supposed to open their networks to competition. They then enter state-by-state,
and then got rid of the competitors that they were required to allow in.

Be that as it may, the Bells currently bundle  and DSL and Long distance and
local service, thus eliminating VOIP services because who would use it after paying for
local and long distance?

Why You Should Care

Most members of the IHH list who have written here are lawyers or technologists. They use big words with precision to describe complex concepts.

It can all be a bit much. It's easy to think this is an issue for elites, that you don't need to care about it.

But you do. Susan Estrada of Firstmile.US   recently explained why you should care, in answer to a question from another member of the group. It's reprinted here with permission:

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Besides the fact that the US in "behind" compared to 15 other countries, there are a lot of compelling reasons for big broadband in the US.  Big money.  Big economic losses (or gains.) Here's a few...

1. Owning the "Internet" industry -- The Chinese have declared that they will own the Internet soon by insuring that their hardware and software is in the core.  The Japanese have declared the same thing.  Having a compelling broadband infrastructure in place helps you understand a lot about how to build a better widget to run the thing (US entrepreneurial spirit and all.)  How can the US compete effectively in this space if our people don't experience real broadband?  Are we gonna lose this like we've lost so many other leadership positions in technology industries? It appears so. 
2. Healthcare -- Baby boomers, Medicare, huge health bills ahead.  The government could save billions by implementing broadband and people could live longer healthier lives.
3. Education -- The US education system is broken - "Stupid in America" is what ABC titled it's recent story.  A recent worldwide study shows the following: At age 10, American students take an international test and score well above the international average. But by age 15, when students from 40 countries are tested, the Americans place 25th.  Can broadband help?  Sure, once a few jillion rules are changed at the state levels.  Broadband can allow kids to learn the way they are genetically programmed to learn. Even Sylvan Learning Centers do broadband education now. Undereducated kids are bad for the economy. For more info on why and what's going on now, see The Content Bank
4. Entertainment  -- twice a year there is a meeting called Digital Hollywood.  Attend any session at the event and listen to all of the companies who are waiting for the US to have real broadband and start figuring out how many billions of dollars they are not getting because we have no national broadband policy. Then, listen to these same companies describe their experiences in connected countries like S. Korea, Japan, Europe, where they have made great strides in bring products to market. Warner Brothers is doing a P2P download trial, where?  In Europe, not the US. 

More examples in each of these areas can be found at the FirstMile Web site .