Open Access Needed
Enjoying fast, fast broadband in Stockholm (my photo, available under cc license)
It’s pretty well-known at this point* that despite the fact that the Internet was largely invented in the United States and that most of the iconic Internet brands are US companies, that America is only a mediocre performer in terms of quality of broadband access and depth of broadband penetration. These points are, however, often made in a pretty superficial way. This recent major study from the Berkman Center (see more discussion) breaks the information down in a more sophisticated way. That shows that some things aren’t quite as they initially seem—Canada and Norway both look worse, for example—but that the US remains a middling performer.
Their main policy conclusion is that “open access” policies of the sort the United States had in the mid-1990s but then abandoned are common across all the high performing nations:
Our most surprising and significant finding is that “open access” policies—unbundling, bitstream access, collocation requirements, wholesaling, and/or functional separation—are almost universally understood as having played a core role in the first generation transition to broadband in most of the high performing countries; that they now play a core role in planning for the next generation transition; and that the positive impact of such policies is strongly supported by the evidence of the first generation broadband transition.
The importance of these policies in other countries is particularly surprising in the context of U.S. policy debates throughout most of this decade. While Congress adopted various open access provisions in the almost unanimously-approved Telecommunications Act of 1996, the FCC decided to abandon this mode of regulation for broadband in a series of decisions in 2001 and 2002. Open access has been largely treated as a closed issue in U.S. policy debates ever since. Yet the evidence suggests that transposing the experience of open access policy from the first generation transition to the next generation is playing a central role in current planning exercises throughout the highest performing countries. In Japan and South Korea, the two countries that are half a generation ahead of the next best performers, this has taken the form of opening up not only the fiber infrastructure (Japan) but also requiring mobile broadband access providers to open up their networks to competitors.
In leading countries like Sweden and the Netherlands, following the earlier example of the United Kingdom, regulators are addressing the complexities of applying open access policy to next-generation infrastructure by pushing their telecommunications incumbents to restructure their operations and functionally separate their units that sell access to network infrastructure from their units that sell connectivity directly to consumers. Moreover, countries that long resisted the implementation of open access policies, Switzerland and New Zealand, changed course and shifted to open access policies in 2006.
We should do this! The main common denominator, I think, is that the high-performing countries are generally places where electronics manufacturers have more political clout than telecom firms and thus are able to force implementation of these open access policies. The United States, meanwhile, is really shooting ourselves in the foot. The software/media nexus of industries is very important to our economy—these are the things we do well—and we’re letting ourselves be stifled by basically useless telecom firms.
* A certain strain of conservative persists in a perverse effort to try to deny this reality, pointing out irrelevant things like that Sweden is smaller than the U.S. or more urbanized. This is true, but the U.S. contains urban areas that are the exact same size as Stockholm and Göteberg and they have slower internet than those Swedish cities. Meanwhile one of our fastest states—about the same on average as Sweden—is the very rural New Hampshire. Our internet is slower because it’s slower, and it’s clearly slower.
24 Responses to “Open Access Needed”
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November 7th, 2009 at 8:58 am
IIRC, Sweden is about the size of California. I’d like to see a comparison of broadband accessibility and speed between the two.
Internet speeds are very slow in much of rural America, where I live.
November 7th, 2009 at 9:35 am
“Enjoying fast, fast broadband in Stockholm (my photo, available under cc license)”
Broadband in Stockholm is so fast that folks can enjoy it without actually looking at their computer screen?
Or perhaps folks in Stockholm just think their broadband is fast, since they haven’t gotten the trick yet of actually of actually using computers.
November 7th, 2009 at 9:46 am
Or perhaps folks in Stockholm just think their broadband is fast, since they haven’t gotten the trick yet of actually of actually using computers.
All Swedes are periodically immobilized for long periods with Bergmannesque angst. It is the only thing that stops them from putting on the helmets with horns and sailing forth to inflict socialism on the world.
November 7th, 2009 at 10:08 am
The death of open access is exactly what killed all the DSL providers except for the phone companies. It kept turning out that strangely, the connections for the non-phone company DSL connections over the phone networks kept having problems, that took days to remedy, while the phone company’s own DSL didn’t have those problems or was fixed much quicker. Because, of course, the phone companies were deliberately working their network side and their DSL side together to degrade competitor’s performance until the competitors went out of business. That’s how we went from the multitude of dial-up providers to having MAYBE 3 choices for DSL/cable these days. And that’s exactly what the stakes are for net neutrality, because now the phone companies and cable companies want to do the same thing to say, hulu, or youtube, or any other media or other sites that compete with ones they run or cut deals with.
November 7th, 2009 at 10:23 am
It kept turning out that strangely, the connections for the non-phone company DSL connections over the phone networks kept having problems, that took days to remedy, while the phone company’s own DSL didn’t have those problems or was fixed much quicker.
This. Exactly. As a sysadmin for a small Internet firm, I arrange for us to get both phone and DSL service from a competitor to the local phone company that maintained the wires. After literally six weeks of them dicking around and failing to install the lines properly, I got fed up and reported them to the State Utilities Commission. The lines were fixed the next day.
It kills me that the state prosecutors never got interested in this behavior.
November 7th, 2009 at 12:20 pm
Why “Open Access”, “Net Neutrality”, and other neologisms?
Sound legal and technical principles for regulation of packet-switched (asynchronous digital) data over circuit-switched or frequency-hopping cellular (analog synchronous) networks have been available for over a century. They have been adhered to widely outside of Anglo-America, where serious economists tend to read List, not Smith or, for that matter, Marx.
Texas still has an elected “Railroad Commission”, even though it now mostly just functions as an adjuct of the “oil & gas” lobby. The Texas Public Utilities Commission has always been an unelected monopoly rent-sharing forum, but now it is wholly “privatized”.
The old, as in durable, principles we should be trying to restore are called common carriage. They are derived from admiralty “law” — actually from a collection of military, commercial, technical, and admiralty conventions administered in Switzerland by what was originally the International Telegraphy Union. These “laws” are consistent with international market competition and national security, in both peace and war, so they are older and have much more general application than anything associated strictly with Anglo-Austrian capitalism, certainly more than the most recent Anglo-American neo-clericalism.
Outside of Anglo-America, there is a tradition of protecting home markets for “infant industries” and for upholding the state’s “monopoly of arms”. That those include a “Zoll Verein” — what we call the “commerce clause” — as well as cultivating a “well regulated militia” (Landwehr)– such as the US proclaimed but never really had.
The old wire-plant (telephone) monopolies are tiny state-local monopoly concessions aggregated into giant, interstate switch-plant monopolies during and just after WWII. The wireless spectrum is allocated federally. Cable-television is a wire-plant monopoly that is federally-regulated for the bi-partisan purpose of protecting (oldfangled-Democratic) or promoting (newfangled-Republican) successors to broadcast radio and television concessions. This was, at best, hastily improvised expediency. Now, it is just unalloyed corruption.
Post-WWII misregulation has no sustainable economic or technical rationale. It is expressed as legal humbug and derived from financial misregulation, specifically, from the public indemnification of improvident investments by government monopolies that have become feudal entitlements — an Orwellian perversion of common carriage.
These mis-regulated entities — increasingly just layered, complex, “securitized” financial entities, not even companies or corporations, save in name — have borrowed and spent on prodigous excess and maldistributed as well as obsolete capacity … surprise, surprise … on the premise that they are “too big to fail” and require perpetual subsidy or indemnity.
Of course, they are by any reasonable economic or technical, but not political, criteria failing.
The reason is that, being misregulated monopolies that are subject to no more than the appearance of regulation, they generate and share a lot of monopoly rent in the form of (a) indirect taxation (locally) and (b) quasi-eelymosynary “donations”, to wit, political contributions.
Besides the computer hardware and software industries we used to have, now called “scalable technology” rather than infant industries, the other victims of this misregulation have been the Communication Workers of America. They bought-in to bubblicious schemes to re-capitalize and re-monopolize the WWII-era monopoly on a sort of a techno-pretext — “Fiber Optics!” — only to get downsized and privatized almost into oblivion. It turns out that technology is actually labor-intensive, while debt-driven monopolies are just lawyer-driven.
In contrast, small European countries cultivate export-industries and preserve ancient militia institutions as telecom plant in a home market that is large enough and, in any case, uniform and very well maintained — not the sort of Potempkin-plant that the US and USSR “converged on” during the Cold War. These vital industries are sources of national income and pride. Their Anglo-American counterparts are sources of patronage and fraud.
The Euro-style state-monopolies are military-patriotic organs. They are not police-patronage instruments of a privileged class or, in the case of the US or USSR, just a self-perpetuating elite.
As we celebrate fall of the Berlin Wall, it is important to note that Anglo-America has yet to restore the popular patriotic, republican political, or competitive economic foundations of Democracy in America that were compromised for the purpose or on the pretext of defeating the Germans, Japanese, Russians, and so on.
No a political-economic (cringing liberal) elite is still perpetuating and trying to exploit legacies of the Great, World, and Cold Wars. A political-economic (neo-Confederate) fringe is, of course, trying to go back even further.
Even a glance at Europe other than England, such as MY has given us, or a little bit of our own history is a guide to 21st century technical progress. Such progress is something Americans are more enthusiastic about than a legalised kleptocracy and jingoistic plutocracy — “public-private partnership!” — that is plainly dysfunctional and seriously unpatriotic.
Outside of and against the collusive bargaining of our ruling elite, look for more “constitutional-patriotic” (center-left) and “racist-aesthetic” (far-right) populism, given that the soft center of Anglo-American politics deserves little trust and even less respect for its parochialism and perversion of any principles whatsoever in favor of legal humbug and, of course, buzz-words or neologisms.
November 7th, 2009 at 12:25 pm
It took me like a full minute to figure out what’s going on in that photo. She is sitting in front of some kind of billboard which is mostly outside the shot, except for the arm of a reclining man wearing a watch. It is not, as I initially thought, a creepy giant phallic snake looking over her shoulder at her computer screen.
This subject is close to my heart but extremely depressing. It’s strange that brands like Comcast have so much power when they are literally one of the most despised brands in America.
Fortunately, this seems like an issue that would take relatively little time to rectify, since part of the whole problem is that our internet infrastructure is pathetic and obsolete. That shouldn’t be hard to fix, once the FCC starts using its head on the issue.
November 7th, 2009 at 1:00 pm
This message is as dangerously subversive to Amerikun society as messages in the Soviet Union that denied that Soviets actually had invented the radio, the airplane, and other marvels.
Amerika is No. 1. We have the best everything in the world. Progress means everyone else becoming more and more like us.
November 7th, 2009 at 1:26 pm
Another core part of the problem is that American broadband providers overpromise and underdeliver on broadband service. No one compels them to provide accurate information to consumers, therefore they don’t.
November 7th, 2009 at 2:00 pm
“Another core part of the problem is that American broadband providers overpromise and underdeliver on broadband service. No one compels them to provide accurate information to consumers, therefore they don’t.”
FIOS delivers precisely what Verizon advertises.
The rest of the broadband ISP’s do indeed lie in their ads (immensely in some cases) and should be regulated.
(I mean, seriously, I’ll use third party speed tests to check and my upload and download speeds are always within 5% of what my FIOS service promises.)
November 7th, 2009 at 2:09 pm
The one company in the US that can really make the difference in the area of broadband penetration is Google. Open access policies are very much in their interest. The question is will they make any attempt to exert influence. Maybe Google does a lot of lobbying but I don’t hear about it.
November 7th, 2009 at 2:19 pm
My phone company pulls the same tricks. It will give me 7 Mbps DSL if I use their ISP. For the exact same price they will only give me 2.5 Mbps if I use my preferred ISP. In fact, if I use my own ISP there is no price I can pay to get faster DSL. I’m stuck at the slow rate no matter what.
November 7th, 2009 at 4:45 pm
Right on, Matt; glad to see you getting into this debate. Improving Internet performance in the US should be a national priority, rather the source of a proxy debate over Nazisocialism as the Glenn Becks would have it.
November 7th, 2009 at 6:22 pm
In the US we typically use 110 power as opposed to Europe which uses the more efficient 220 power. The reason? The US built its electrical grid first while Europeans had the advantage of learning from the US’s mistakes, and having to rebuild their grid after WWII had flattened the continent. Sometimes; often in fact; it pays to not be the first to do something.
As for broadband, I’d love to have South Korea’s blazing fast network. It would also be great if the government built this stuff and we’d all have high speed internet for free. But then service providers would go broke and someone needs to actually turn a profit via the internet. After nuking the publishing/music and newspaper industries, the internet would add Comcast’s bloody head on a spike to its collection of slain foes. In a weird non-self interested way, I find that kind of sad.
November 7th, 2009 at 7:15 pm
“Open access” is already a well-established term with a completely different meaning. Please use another term!
November 7th, 2009 at 7:19 pm
This is another of those issues where it’s not entirely clear why Republicans are so insistent that there is not problem in the first place. The statistics on US broadcast vs other countries would seem to be clear enough. And it’s an issue that cuts directly to the heart of our economic competativeness (as Matt correctly notes). You’d think that somebody on the right would, you know, care.
In a cynical mode, I’d say that it’s just because the Republican party is a wholly-owned subsidiary of Big Business. But even that isn’t really all of it, I think. As Matt says, electronics and gizmo companies like open access and would be doing more and better business if the US were more wired and more like Korea and Japan, yet the Republican party seems pretty much indifferent to that business perspective.
In a more cynical mode, I’d consider the possibility that Republicans actually really do prefer stagnant, ossified businesses like telecoms and see them as the ‘future’ of the US, where companies that would prefer open access are… not reallly…. uh… I’m running out of ideas here. Anybody got any reason why even a ‘pro-business’ party would love Ma Bell that much more than Apple?
November 7th, 2009 at 7:43 pm
Because REAL manly Americans don’t need those sissy white iPods that all those metrosexuals have? Or because Apple’s located in California, which as we all know isn’t really part of America?
[I dunno, this is about all I can come up with. I try not to spend too much time thinking about what goes on in their heads.]
November 7th, 2009 at 8:44 pm
Innovation is out. Rent seeking is in. Most will see this as a typical to economies in decline but it is worth considering that such trends play a functional role in decline. As assets become more centralized and entrenched then rent seeking becomes progressively easier.
November 7th, 2009 at 8:46 pm
It should be acknowledged however that American companies are at the forefront of innovation, in rent seeking.
November 7th, 2009 at 10:28 pm
I also had FIOS when I lived in Northern Virginia, and it was by far the fastest, most reliable internet service I’ve ever had. (In fairness, just being NEW probably matters here too).
OTOH, Verizon’s wireless service is also far superior to the competition, in my experience. For some reason, they alone seem to approach their communications business as if providing superior communications matters. (No, I don’t work for them; and in fact I’m stuck with AT&T for local provider and wireless because of a decision that made sense at the time.)
November 7th, 2009 at 11:33 pm
Oh, yeah, that’s the phrase I was looking for, rapier.
The Republican Party is the Rent-Seeking Party. That’s their economic theory. I need to keep that in mind.
November 8th, 2009 at 5:05 pm
I happen to work in telecomsregulation in Denmark. If you are interested in this topic and how it works in europe, then just send me an email and I will get you the relevant infomation ect.
November 10th, 2009 at 1:47 pm
Since an exchange that Matt & I had via Twitter on last Friday seemed to drive part of this post, I feel it’s only right that I reply.
First, as to the central point of how America stacks up to the rest of the world, I would never argue that we lead the pack on broadband. But if you’re going to argue who is leading, you should acknowledge that there is great difficulty in measuring the rankings. The OECD is quite flawed (as we pointed out on our blog), since there is inconsistency in their measurements. Wireless access is counted for some countries, but not for others. By measuring total (primarily household) subscriptions per units of 100 inhabitants, countries with fewer average residents per household rank higher. Yochai Benkler has acknowledged that the Berkman study also has some flaws in its data.
Next, some of Matt’s arguments apply to the telephone companies, but not to the cable industry (where I work). For example, he speaks of “open access” policies being abandoned, but those policies never applied to cable, since we built our own network with private capital, instead of using the public switched telephone network.
As for the influence, I’m unclear if Matt’s argument that consumer electronics manufacturers wield a strong influence is based on the fact that Japan and South Korea are typically listed as broadband leaders; otherwise, I’m not sure where he gets that from. I have some knowledge of international telecom regulation, and I’ve never run across the suggestion that the electronics guys played any major role in broadband. Alternately, the government often has a direct role in the deployment of broadband, since the major telecom providers in some countries were once government-controlled entities.
Despite Matt’s suggestion that geographic size and urban density don’t matter, they do. As Saul Hansell noted in the NYT’s Bits blog earlier this year, in most of the world, broadband is delivering via DSL. The distance to your home can be a limiting factor.
The killer argument, of course, is that “Our internet is slower because it’s slower, and it’s clearly slower.” Slower than whom, why and what do we do about it? There are important factors too. Matt pulls up New Hampshire’s rankings as though this trumps all the other arguments. Either we’re comparing states to countries or countries to countries.
Yes, New Hampshire is a rural state, but it’s still much more dense than Wyoming or Montana, for instance. New Hampshire has 1.5 million people in 9,300 square miles. Wyoming has 500,000 in 97,000 square miles. You can’t equate those as “rural states” and wash your hands of the density argument.
According to Akamai’s State of the Internet report, New Hampshire and Vermont are doing well on speed. But so are Delaware, New York and Connecticut. Find me a rural state outside of the Northeast that does as well and we’ll talk.
November 10th, 2009 at 10:15 pm
There’s no mystery here. American broadband is slower than in developed countries because American elites see their highest calling to be colluding to screw the public.