Thursday, December 15, 2011

Is the U.S. wired Internet infrastructure weak? Revisited.

It’s time to weigh in on a pet peeve of mine. The topic is the state of high-speed Internet in the U.S., in a December 4 essay in the New York Times. My peeve is that once again the U.S. wireline infrastructure is portrayed as somehow way behind, whereas a reasonable analysis presents a very different picture. For a large country, the U.S. actually has a very strong and affordable infrastructure.

It’s the author has a point. There is a digital divide in the U.S. and in the world. It’s increasingly important to treat broadband access as a necessary service for all citizens. National averages overlook that large groups people are left out.

The problem is how the point gets twisted along the way. The way the author explains it is like fingernails on a blackboard to me. I've complained in this blog before (here and here) and I can't let this one go too.

For example, the U.S. is portrayed as 12th in the OECD economies. That's per capita. Iceland is number 5. It has 110,000 people. You get the idea. The OECD aggregates across the whole U.S., while smaller countries will almost certainly show up in the wings of the distribution. We should compare tiny Iceland with, say, a successful regional provider in the U.S., not the entire U.S. In fact, larger countries like Germany and France are passing us up. That is important. Let's say it.

The author points out that even Portugal and Russia are upgrading to optical fiber. That’s because their infrastructures were so bad in the first place. The U.S. is rewiring with fiber, but it’s a big country, DSL is working pretty well, and someone has to pay for upgrading to fiber. A too-rapid deployment would recreate something on the scale of the Telecom Bubble of the late 1990s. We know how that turned out.

Broadband is also portrayed as a monopoly, yet residential users can choose from the wireline provider, cable provider, and even wireless providers. Competition is good, but we’ve come a long way.

The author says the providers should sell access to their networks to competitors, to reduce prices. But the problem is that everyone wants the high-end customers. There’s a reason that underserved neighborhoods are underserved. There’s less profit there.

Having worked in telecom policy in Washington, it is an ongoing process to improve broadband access to underserved groups. It’s messy, because there is the FCC and Congress, 50 state regulators, municipal governments, and the courts. And it’s “inside baseball”; pretty boring stuff if you’re not a lawyer.

The author is right, we should be striving for broader broadband access.I guess it’s just something about how she said it.