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The Devil Is In The Details: FCC Chairman Julius Genachowski Speaks About Broadband to Consumers

Phillip Dampier September 18, 2009 Competition, Editorial & Site News, Public Policy & Gov't, Rural Broadband 7 Comments
Phillip Dampier

Phillip Dampier

FCC Chairman Julius Genachowski recorded a YouTube video to talk to Americans about the development of a national broadband plan for the United States.

In optimistic, flowery language, Genachowski invited Americans to submit their ideas and suggestions not only regarding broadband, but also the priorities Americans think the FCC should have in the future.

The most important part of the five minute video comes right in the beginning when Genachowski called broadband critical to the nation:

“Broadband is our generation’s major infrastructure challenge. It’s for us what railroads, highways and electricity were to past generations.”

Genachowski would do well to remember America’s experience with all three of these important history lessons.  The broadband plan Genachowski envisions is subject to the same type of intrusive, anti-consumer tactics that wreaked havoc on past generations of consumers.

The railroad industry’s cartel of ownership and control is a familiar tale.  The Rise of Monopolies tells the story:

The need for all of these industries to stay successful was worrisome for railroad owners. To avoid the loss of production in any of these areas, large corporations attempted to stabilize their situations by pooling markets and centralizing management. By combining all of the fields into one conglomeration, the railroads had a new power, as they acquired control of many facets of the new economy. This body now had the ability to “squeeze out competitors, force down prices paid for labor and raw materials, charge customers more and get special favors and treatments from National and State government” (Chalmers). The railroads had all the power, because they controlled all the prices. Since the new residents of the West could not survive without the use of the railroads, they were forced to pay whatever rates the railroad companies set.

With these huge stores of capital, the railroad companies were able to finance political campaigns through whatever and whomever was needed in government. With this control in Washington, there was no way to stop the overwhelming control of this industry over society. The entire nation was subject to the whims of this monopoly.

It took direct government intervention to break up the railroad monopoly and protect consumers and businesses from the abusive practices of a transportation industry that can make or break you based on pricing and service, with little competition.

Public highways became an important asset that still pays off today.  The Eisenhower Administration’s deployment of the interstate highway system, at the size and scope required, would not have been accomplished by the private sector on its own.  Today’s federal highway system is largely self sustaining through the collection of gasoline taxes paid by drivers.

As Americans struggle with several incumbent providers that refuse to provide 21st century broadband technology, with little competition to drive that infrastructure investment, an uneven variety of broadband networks have emerged, from fiber to the home in some areas to an indefinite reliance on aging DSL slow speed technology for millions of rural Americans, or worse, inadequate satellite broadband.

It may be time to consider the same kind of national approach with a publicly owned fiber network private providers of all kinds can use to serve customers with a uniformly high speed, high quality user experience.

Electricity and the development of rural America is another very familiar tale to any rural broadband user.  From TVA: Electricity for All:

Although nearly 90 percent of urban dwellers had electricity by the 1930s, only ten percent of rural dwellers did. Private utility companies, who supplied electric power to most of the nation’s consumers, argued that it was too expensive to string electric lines to isolated rural farmsteads. Anyway, they said, most farmers, were too poor to be able to afford electricity.

The Roosevelt Administration believed that if private enterprise could not supply electric power to the people, then it was the duty of the government to do so. Most of the court cases involving TVA during the 1930s concerned the government’s involvement in the public utilities industry.

In 1935 the Rural Electric Administration (REA) was created to bring electricity to rural areas like the Tennessee Valley.

Many groups opposed the federal government’s involvement in developing and distributing electric power, especially utility companies, who believed that the government was unfairly competing with private enterprise. Some members of Congress who didn’t think the government should interfere with the economy, believed that TVA was a dangerous program that would bring the nation a step closer to socialism. Other people thought that farmers simply did not have the skills needed to manage local electric companies.

Any community wrestling with a municipal broadband project to provide service the private market refused to offer is already acquainted with this familiar story.  So are many rural consumers who are waiting, and waiting, and waiting, for the private market to bring broadband to their communities.  Unfortunately for them, the private market has already written them off as “not profitable enough” to provide service.

The electrification of America did not lead to a socialist takeover of America.  It led to the development and sustainability of rural communities and their local economies.  Agriculture remains one of America’s most important success stories, and without widespread electrification, this story might not have been written.

Scare tactics and horror stories have come whenever a private monopoly or cartel faces the threat of competition, regulation, or a municipal option to provide needed services communities are denied by the private sector.

The fear mongering was there when the railroad monopolies faced investigation and regulation, the “socialism” scare was heard when government attempted to undertake public infrastructure projects of many kinds from highways to utility service, and the same kinds of rhetoric is heard today about “socialist takeovers of the Internet” and “municipal broadband unfairly competes with private providers,” and the logical opposite “the government can’t do anything right.”

Unfortunately, the FCC has a long history of cozy relations with lobbyists who understand how to work within the agency’s nearly-impenetrable bureaucracy.  A review of the broadband plan submissions to the FCC reveals a large  number of them come from lobbying groups and the providers themselves.  Most consumers were left typing comments into a box on the web submission form, with every indication those remarks will be deemed “not serious” by FCC staff.

This time, Chairman Genachowski has to show more than a YouTube video inviting consumers to share their input.  We’d like actual evidence the consumer point of view is actually being taken seriously for a change, and is not simply one tiny noise drowned out in a loud crowd of special interests with profit agendas to protect and public policy to influence.  The FCC already knows what consumers want: widely available, fast, reasonably priced broadband free from Internet Overcharging schemes protected with robust Net Neutrality policies enforced by law.

If the existing providers want to erect roadblocks to competition, oversight, and hell-or-high-water-broadband-deployment, it’s time to break them up and get them out of the way.  That’s broadband we can believe in.

Currently there are 7 comments on this Article:

  1. Ian L says:

    Yaknow, what’s stopping telephone cooperatives (who know ho to do communications infrastructure) from partnering with electric cooperatives (who have physical wires and poles to nearly every house in rural areas) to deliver FTTH to rural customers? Electric co-ops provide cheap pole space, possibly in exchange for a small cut of network revenue to encourage the co-op to sign on their customers for internet. Telephone co-ops string fiber between the poles. Sure, ROI isn’t going to be crazy like in urban environments, but on the other hand if your competition is satellite TV and internet, you can charge $70 for a 3 Mbps connection, $40 for phone service and same-as-sat rates for TV service and make a killing.

  2. Tim says:

    Fiber, fiber, fiber!!! We need to retire copper!! If we want to stay relevant as a country, we need to start installing a fiber optic infrastructure. Copper in a few years won’t be cutting it with the new technologies emerging on the internet. If we are going to rebuild America’s infrastructure, have those people lay down fiber too! The only thing using copper should be only the electrical grid.

  3. Greg says:

    A very good post Phillip!!! Two very good analogies!

  4. Uncle Ken says:

    Oh copper is still useful. It has been around for a long time and will
    be with us for many more years. Look at coax…Nice round cable with
    some foam and a shield but what do you find in the center? Copper.
    Years ago it was a back breaking job to wire this country with copper.
    Now the poles are set and it was and still is a back breaking job to
    string coax. Fiber is the new guy in town. Fiber from pole to house
    is still a dream for many…. a very expensive dream. Guess its still
    one step at a time. Copper for grids? They are working to get by
    that. Super conductors and such. When your cell phone tower bite’s
    it, your out of battery guess what still works even after a massive
    storm. My lowly ma bell copper still works 9 times out of ten. I got
    rid of my cell phone years ago. Price / value was not there and the
    only people that called me were people that wanted something

    • Smith6612 says:

      Here, I still use cell phone from time to time, but I still have land line service with my telephone company. For the most part, when copper is well taken care of it’s great for telephone service as it’s highly redundant and does sound good, for data not so much. The last time I recall one of my land lines going down was during the Buffalo October storm that hit this area a few years ago. I lived in one of the areas that was fortunate enough to not lose power. Cable TV service was only out for a few hours after the storm, and telephone service did remain online. Now, the thing is though on my Verizon line, the remote was running off of battery power (the entire area the CO was fueling was without power), so really a day after the storm hit, my telephone and DSL did go out for a half a day until power was restored to the remote. During that time I had to use my Frontier line since I needed to do some important work on the Internet. Verizon couldn’t get to the remotes to get them online at least until a day after the storm since there were too many downed trees and the roads were all closed.

      Now for the most part, I believe the telephone companies have to try to keep the network online during disasters. I know that when power goes out in my area, in the case of Frontier there will always be a tech either at the CO or nearby who can go to the office, grab a company truck and take a large diesel generator out to the remotes to keep them online. We had a storm for a matter of fact come through a month and a half ago that took power out to all of the areas that Frontier covers in my area. Every one of their remotes had to shut off DSL and revert to battery power. My remote was the first to get power, but the only thing that would work on my line was telephone; DSL was completely off until the remote gained power. Coming out of the CO I would have still had DSL as they can remain fully online with their diesel generator built into the office. From what I know, there was one remote that Frontier has in my area that was out for hours. Frontier had to leave a diesel generator plugged into it throughout the night to make sure it remained online (they only use batteries to buy them some time, as they only last for a few hours according to a tech in my area). The thing I notice about my land line is, whenever power is first restored to the remote, I’ll get some slight static on my line for a few minutes. I was on the phone with a Frontier tech in my area’s CO at the time and he pretty much thought it was weird, but we did agree it was probably the equipment coming online or some storm damage (turns out later on I had to get a line card replaced, it was fried by lightning).

    • Tim says:

      Like I said, copper in a few years won’t be cutting it. It just can’t handle the bandwidth fiber can. Coax is limited to 10Mb/sec by itself. DSL, is even worse. Most cable companies have got beyond this barrier through a hybrid fiber/copper system. Most countries are installing a fiber infrastructure because they see its relevance to the future. Copper might seem relevant today but you have to think about the future many years down the road. Fiber is more expensive than copper. You have that right but the Interstate System when it was being built wasn’t cheap either for its time. Few countries have a highway system like that. Can you imagine life without that interstate system and how different our country would be? If we don’t do it as a nation, we will be waiting decades for private business to do it.. Here it is 2009, almost going on 2010, and we have only 3% fiber coverage overall. The Internet today is evolving fast. Just a few years ago, most people just checked their email and browsed for websites. Now, people game online, share files, backup their files online, download movies, download music, websites have fancy flash effects now, download patches and security updates, watch tv, listen to the radio, make phone calls, and the list goes on and on. It is time to retire copper.

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