My OperaBacking into the Internet Age
Saturday, October 9, 2010 9:03:55 PM
Backing into the Internet Age
Hey, gang, Team USA is Number 15! Here’s yet another infrastructure outrage for you:
Since 1991, the telecom companies have pocketed an estimated $320 billion — that’s about $3,000 per household.
This is a conservative estimate of the wide-scale plunder that includes monies garnered from hidden rate hikes, depreciation allowances, write-offs and other schemes. Ironically, in 2009, the FCC’s National Broadband plan claimed it will cost about $350 billion to fully upgrade America’s infrastructure.
The principal consequence of the great broadband con is not only that Americans are stuck with an inferior and overpriced communications system, but the nation’s global economic competitiveness has been undermined.
In a June 2010 report, Organization for Economic Co-operation and Development (OECD) ranked the U.S. 15th on broadband subscribers with 24.6 percent penetration; the consulting group, Strategy Analytics, is even more pessimistic, ranking the U.S. 20th with a “broadband” penetration rate of 67 percent compared to South Korea (95 percent), Netherlands (85 percent) and Canada (76 percent). Making matters worse, Strategy Analytics projects the U.S. ranking falling to 23rd by year-end 2010…
I know as much about broadband as I do about the Emperor Hadrian, but I have a mole planted deep within a giant telecom company. She reports as follows:
Well, the news that we are way behind much of the world in connect speeds is right, but I don’t understand many of the other claims. The telcos definitely grab whatever they can get from deals with the PUCs, but from what I can see, that usually does not amount to that much.
What a lot of confusion and inefficiency arises from is that the PUCs will require the telco (in exchange for some rate break or something) to build out their infrastructure such that some number of folks are *able* to order a broadband connection. There is never a requirement to actually *sell* the service.
The telco will then plow in fiber, deploy equipment, etc., to fulfill their obligation to offer service to some god-forsaken county in the middle of New Mexico with 10,000 people in it. Then, 83 of them actually sign up for service. So, assuming that the rate break or other incentive actually did result in more telco revenue, a lot of it has to be spent on the buildout to service those 83 people.
Nobody walks away a winner. The PUC is mad that the hicks are still not online, the telco is shaking their heads saying “I told you nobody would buy it! We’re gonna have to keep that crap running for years!”, the 9,917 folks that still have no broadband still can’t see their YouTube, and everyone is sad that we are another step behind in the race to connect everyone.
So, it really is not some gift to the telcos. Neither is it money well spent in connecting folks to broadband. It is the worst of both worlds — little extra broadband penetration, no telco windfall, and only a bunch of aging equipment deployed with little chance of ever being used. It is really just an inefficient regulatory effort to accomplish something with not enough information or control.
Probably the only way to fully connect the boonies is to re-regulate and force the issue that way. It is just too expensive to do it otherwise.
Hey, gang, Team USA is Number 15! Here’s yet another infrastructure outrage for you:
Since 1991, the telecom companies have pocketed an estimated $320 billion — that’s about $3,000 per household.
This is a conservative estimate of the wide-scale plunder that includes monies garnered from hidden rate hikes, depreciation allowances, write-offs and other schemes. Ironically, in 2009, the FCC’s National Broadband plan claimed it will cost about $350 billion to fully upgrade America’s infrastructure.
The principal consequence of the great broadband con is not only that Americans are stuck with an inferior and overpriced communications system, but the nation’s global economic competitiveness has been undermined.
In a June 2010 report, Organization for Economic Co-operation and Development (OECD) ranked the U.S. 15th on broadband subscribers with 24.6 percent penetration; the consulting group, Strategy Analytics, is even more pessimistic, ranking the U.S. 20th with a “broadband” penetration rate of 67 percent compared to South Korea (95 percent), Netherlands (85 percent) and Canada (76 percent). Making matters worse, Strategy Analytics projects the U.S. ranking falling to 23rd by year-end 2010…
I know as much about broadband as I do about the Emperor Hadrian, but I have a mole planted deep within a giant telecom company. She reports as follows:
Well, the news that we are way behind much of the world in connect speeds is right, but I don’t understand many of the other claims. The telcos definitely grab whatever they can get from deals with the PUCs, but from what I can see, that usually does not amount to that much.
What a lot of confusion and inefficiency arises from is that the PUCs will require the telco (in exchange for some rate break or something) to build out their infrastructure such that some number of folks are *able* to order a broadband connection. There is never a requirement to actually *sell* the service.
The telco will then plow in fiber, deploy equipment, etc., to fulfill their obligation to offer service to some god-forsaken county in the middle of New Mexico with 10,000 people in it. Then, 83 of them actually sign up for service. So, assuming that the rate break or other incentive actually did result in more telco revenue, a lot of it has to be spent on the buildout to service those 83 people.
Nobody walks away a winner. The PUC is mad that the hicks are still not online, the telco is shaking their heads saying “I told you nobody would buy it! We’re gonna have to keep that crap running for years!”, the 9,917 folks that still have no broadband still can’t see their YouTube, and everyone is sad that we are another step behind in the race to connect everyone.
So, it really is not some gift to the telcos. Neither is it money well spent in connecting folks to broadband. It is the worst of both worlds — little extra broadband penetration, no telco windfall, and only a bunch of aging equipment deployed with little chance of ever being used. It is really just an inefficient regulatory effort to accomplish something with not enough information or control.
Probably the only way to fully connect the boonies is to re-regulate and force the issue that way. It is just too expensive to do it otherwise.
