Even though America is in a "global bandwidth race" and our "nation's future economic security is tied to frictionless and speedy access to information," according to FCC Chairman Julius Genachowski’s latest speech – we don't have a plan for winning that race.
[#contributor: /contributors/5932739a2a990b06268aab71]|||Susan Crawford is a visiting Stanton Professor of the First Amendment at Harvard's Kennedy School and a Visiting Professor at Harvard Law School. Crawford was a board member of The Internet Corporation for Assigned Names and Numbers (ICANN) from 2005-2008, and served as Special Assistant to the President for Science, Technology, and Innovation Policy in 2009.|||
And our current incumbent providers are not going to help. They’re not going to be the ones rolling out the fiber-to-the-home networks that could provide this speedy access to information. Why? They have no incentive to do so. Because they never enter one another's territories, they don't face the competition that might spur such expansion.
Instead, incumbent internet access providers such as Comcast and Time Warner (for wired access) and AT&T and Verizon (for complementary wireless access) are in "harvesting" mode. They’re raising average revenue per user through special pricing for planned "specialized services" and usage-based billing, which allows the incumbents to constrain demand. The ecosystem these companies have built is never under stress, because consumers do their best to avoid heavy charges for using more data than they're supposed to. Where users have no expectation of abundance, there's no need to build fiber on the wired side of the business or build small cells fed by fiber on the wireless side.
If the current internet access providers that dominate the American telecommunications landscape could get away with it, they'd sell nothing but specialized services and turn internet access into a dirt road.
But the key barrier to competition – the incumbents’ not-so-secret weapon – is the high up-front costs of building fiber networks. That’s why the new 1-gigabit-per-second network planned by Google for residences in Kansas City was cited as an example of a "positive recent development" in the FCC chairman’s speech. Google was welcomed with open arms by Kansas City because the company offered a wildly better product than anything the cable distributors can provide: gigabit symmetric fiber access. The company has the commercial strength to finance this build itself, and it has driven down costs in every part of its product to make its Kansas City experiment commercially viable.
>If they could get away with it, they'd sell nothing but specialized services and turn internet access into a dirt road.
While the Google Fiber plan provides a valuable model, other communities that want to ensure their residents get fiber to the home shouldn't have to wait.
We need policies that lower the barriers to entry for competitors. Otherwise, we'll be stuck with the second-best cable networks now in place around the country, with their cramped upload capacity, bundled nature, deep affection for usage-based billing, and successful political resistance to any form of oversight.
So let's look at a country that has a plan. According to a recent report by Paris-based fiber consultancy Diffraction Analysis, New Zealand is a country with a model that works: If you're in the network services business, you can't also be selling apps. This required "structural separation" prevents the country’s telecom companies from discriminating against competitive services (think AT&T blocking FaceTime).
But the most important step New Zealand took was reducing the risk of up-front investment in fiber networks by financing the building of basic networks itself. The final connections to homes are built by private partners, who then buy back the basic network those homes connect to. As the government's investment is returned, it can then invest released funds in additional infrastructure – all while stimulating private investment. The New Zealand government has also set wholesale pricing for fiber so it's attractive for people to move from copper to fiber connectivity, and lots of retail fiber providers are showing up. The result: Very fast adoption of competitive fiber-to-the-home.
Similarly, if we wanted ultra-high-speed connectivity in the U.S., we could:
- Provide loan guarantees for building basic competitive fiber infrastructure;
- Preempt state laws that make it difficult (or impossible) for municipalities to commission their own fiber networks;
- Require wholesale providers to build open, non-discriminatory networks as a condition of getting access to rights-of-way; and
- Require separation between content and transport providers to avoid the risk of harvesting.
Most fundamentally, America should be planning for this communications utility in the same way we plan for water and electricity – ensuring that conduit is everywhere. With a functioning wholesale marketplace, competitive retail providers could keep us from being stuck with operators that can harvest additional revenues solely because of their physical market power over basic pipes and wires (think Comcast making 95% margins on its broadband product).
Wellington, New Zealand, cheerfully announced this past month that ducting for fiber was being installed and that this would require "the creation of some large holes - mainly on footpaths or close to the kerb (sic)" that may cause noise and inconvenience. New Zealand is willing to assume that some government involvement in basic utility services is essential for competition to flourish.
And the residents won't have to wait for Google.
Wired Opinion Editor: Sonal Chokshi @smc90
