Maybe Monopolies Aren’t Bad for Telecommunications After All

Seeing a title like “Broadband Needs Political Leadership” kind of stops me in my tracks, not that I disagree with the author in principle. It’s just that we’re not exactly talking about “unclogging the tubes of the internets”.

I think the main problem facing the United States is the corporate structure of telecommunications and broadcasting brought about by anti-trust actions in the past as well as the cycle of regulation and deregulation.

The reason why countries like Japan and Korea have been able to push out changes and increase the adoption of fiber and other broadband technology is because the telecommunications and broadcasting sector maybe privatized but still under heavy central control.

Japan leads the OECD in fibre-to-the-premises (FTTP) with 6.3 million fibre subscribers in June 2006. Fibre subscribers alone in Japan outnumber total broadband subscribers in 22 of the 30 OECD countries.

OECD Broadband Statistics to June 2006

Although it may shock some Japan certainly has some of the cheapest and fastest connections in the world. Government can push for changes quite easily because they have a central point of control. In a twist of fate, the lack of fragmented competition in the telecommunications is probably what allows for the cheap prices as it eliminates the need for cut-throat competition (which eats away at infrastructure investments) and the fact that infrastructure investments aren’t redundant but centralized.

Political leadership in this field is highly doubtful when you’re weighing the political clout of telecommunication lobbies not to mention the entertainment industry (who would rather see slower connections to limit piracy) against the needs of the average user.

Also the fact that broadband is still vaguely defined to include DSL (which should be the baseline for most industrialized countries) means that politicians can shift definitions to meet policy targets.

As Paul Kapustka says, maybe local initiative is the only way forward.

Maybe starting locally is the best way to go, since experiments can happen faster and more methods can be tested. Given the current President’s preoccupation with weighter matters like Iraq, and the current apparent unwillingness in Congress5 to take on big-picture telecom reform in 2007, local experiments may be all we have for the near-term future.

Another would be to broadly redefine the Department of Transport to include telecommunications as well. This isn’t as far-fetched as it seems to most American readers as many nations have ministries that handle transport and communications as one. In many cases roads provide the needed land for laying cables of various sorts and the movement of people, goods, and information is the backbone of society. It also helps that transportation is amply funded by various fuel taxes.

Either way, the last the United States wants to do is miss the boat and give up it’s place as the IT leader of the world. With computer capabilities on a steady rise the only thing holding back interesting ideas and novel applications could be “them tubes”.

Leaving broadband build outs to the big telcos and cablecos — an idea that probably passes as strategy for the current administration — isn’t going to get us to ubiquitous broadband anytime soon. Both Verizon and AT&T are struggling to bring their networks up to speed, and are likely to focus on providing services to high-paying customers first to satisfy Wall Street.

GigaOM » Broadband Needs Political Leadership

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