Everyone agrees that the U.S. is not doing as well as it should, but few agree on how to solve the problem.

by Alex Goldman ISP-Planet Managing Editor [December 1, 2008]

In the ISPCON session National Broadband Policy: Pro and Con Arguments, I set up a debate between Jim Baller, who has been arguing in detail in favor of a national broadband policy since 2004, and Dewayne Hendricks, who has built broadband abroad but dislikes the regulation at home. Wired Magazine called Hendricks the Broadband Cowboy in 2001.

I had originally invited Bruce Mehlman, co-chairman of the Internet Innovation Alliance. ISPCON attendees, I believe, would have liked to have met a Republican who served in the Bush administration and who cares about the internet. In a video on the site, Mehlman says that we need the internet and that, "we treat broadband like a luxury and we tax it like a sin. We regulate it like a utility, but subsidize yesterday's technologies. At times, we seek greater competition and at times we hinder investment that would enable that competition."

Baller, founder and president of the Baller Herbst Law Group, comes to the table with a less rosy view of the Bush administration than Mehlman, and with, I believe, deeper knowledge of the subject.

A former ISPCON keynote speaker, Baller argues that, on the Bush Administration's watch between 2001 and the present, America lost its broadband leadership to nations like Japan. Using statistics such as those produced by the OECD (at the OECD Broadband Portal), he tracked the decline.

"The U.S. had been ranked first in global broadband penetration in the 1990s," Baller said. "It was ranked third or fourth in 2001."

Now it's ranked between 15th and 25th in broadband deployment, depending on the survey one consults. "Stagnation and decline," writes Sascha Meinrath, research director of the New America Foundation's Wireless Future Program.

Baller noted several shortcomings of the Bush FCC. "They initially defined broadband as 200 kbps in two directions, but when they learned that cable networks had upload speeds of only up 128 kbps, they came up with a new definition: 'high speed' was defined as 200 kbps in one direction, and focused on that. They also reported on, but deemphasized, what they called 'advanced telecommunications capability'—defined as 200 kbps in two directions."

The FCC's data wasn't very good either. "For example, they said that broadband was available throughout a ZIP code even a single broadband line was present in the ZIP code. By that measure, broadband was supposedly available in 99 percent of the country. We know that wasn't correct."

"In 2004, we dropped to 10th or 11th in broadband deployment. President Bush and Senator Kerry both called this a serious problem, and President Bush set a goal of affordable broadband for all Americans by 2007. He did not implement that goal, however, with aggressive action plans, and we continued to drop on most measures of success in broadband deployment. Among the most troubling of these is that we're now 18th in the world in Mbps per dollar at the fastest speeds, which is where tremendous innovation is going to occur."

The Japan model
In contrast, in 2001, Japan was "not on the charts," said Baller. Japanese people watched in awe as South Korea built the fastest broadband network in the world.

In 2001, Japan's government and industry leaders got together and implemented the e-Japan strategy.

The strategy included tax incentives, low-cost loans, grants-in-aid to municipalities, a massive program of public education, strict regulation, and open access.

Within 3-4 years, Japan had the best and cheapest broadband in the world, and then Japan developed a new initiative—the "u-Japan strategy." The "u" has two meanings. One is that Japan is striving for seemless connectivity between wired and wireless broadband. The other is that Japan "views broadband as addressing every challenge it faces."

By 2010, fiber should be available in 90 to 95 percent of the country.

"Without a broadband strategy," Baller said, "the default winners during the Bush Administration were the established cable and telecom companies. Now, we need a strategy that works for everyone, including the incumbents, but also including providers of affordable, robust broadband everywhere. It will improve our economic development, health care, education, and more."

Hendricks
Dewayne Hendricks, CEO of Tetherless Access, Inc., noted that he was part of the FCC's Technological Advisory Council. The TAC's last meeting was in June, 2006. After that, Hendricks says, Martin killed it.

Hendricks quoted David Clark, chair of the IEFT in 1992, who said, "We reject: kings, presidents and voting. We believe in: rough consensus and running code."

Nowadays, he noted, it's all about the voting, and the politics.

The people who run the internet, Hendricks said, no longer talk to its users. He said that in Silicon Valley, "we have people here who have more money than God but refuse to pay over $30 per month for bandwdith."

The cable companies and telcos do not provide the real internet. Many block ports or services.

"If I want 8 Mbps symmetric, always on, unblocked, I will pay $600 per month. Who's going to pay even one eighth of that for 1 Mbps? We have not have been able to close the deal with our customers."

One issue, Hendricks said, is that in other nations, there's peering, but that peering in the U.S. is dominated by a few players.

This closed internet is dominated by a companies that want to choose the goods and services that are traded over it and prefer the cellular network, where they have total control, to the internet, where they cannot control everything.

Baller said that nothing Hendricks said precluded a national broadband policy and that everyone should participate in the authoring of a national broadband policy. He invited ISPCON attendees to a meeting on December 2, 2008, which we will have more information on later this month.

Questions
A journalist at the session asked whether Obama's election made a national broadband policy more likely.

"I do think that President-elect Obama's arrival means change," Baller said. "Even Senator McCain would have had a positive effect. Obama will reportedly focus first on making affordable broadband universally available. That will probably be at slower speeds than high-capacity networks would support. I believe that a national broadband strategy also needs to address how the United States can stimulate the deployment of high-capacity next-generation networks as rapidly as reasonably possible, because it's these networks that will do most to help America stay competitive with the leading Asian and European nations in the emerging knowledge-based global economy."

Hendricks said that the Clinton FCC was in the process of opening up wireless spectrum, and that had they succeeded, the U.S. would be better off.

As I write, Obama has not yet named someone to the FCC, but his transition team is knowledgeable. My only worry is that an Obama FCC will try to make business decisions for ISPs just as the new Congress will try to make business decisions for our bankrupt auto industry.

— End