Today is OneWebDay and around the world, people will be celebrating the internet and drawing attention to the digital divide. Events will be held around the world, including here in New York City, where several speakers will talk about freedom and the internet.
On Saturday, I spoke at a related event, talking about What Broadband Is And Why We Need It. I argued that broadband is not a luxury.
What is Broadband?
Broadband is faster than dialup, and the speed enables not just convenience but entirely new applications. I like to compare it to the diffrence between a phone call and the telegraph. The telegraph was patented in the U.S. in 1837, while the telephone was patented almost forty years later.
With a phone call, you get direct contact, intimacy, and the ability to ask and answer questions immediately. The telephone does more than transmit data faster than the telepgraph.
In order to use broadband for real time applications, it needs to have low latency. Just as a phone call on earth is different than a phone call to the space shuttle, applications that encounter latency break or degrade in quality.
While this may seem to be a simple question, the FCC is still pondering its definition of broadband, although the questions it is asking suggest that the definition of 2009 will be better than the definition of the past: 200 Kbps in one direction.
Why is Broadband Important?
As the quality of services offered over broadband increase, the quality of comparable offline services declines. Craigslist is harming the newspaper industry by attacking classified ads, a service that subsidized investigative journalism, but classified ads on the internet are easier to publish, search, and read than classified ads in newsprint.
The same is true with government services. One of the best government websites is the IRS, where you can download tax forms quickly. The offline alternative is to go to an IRS office in person to get the forms. At New York City’s MTA website, you can get subway maps and bus schedules. These maps and schedules are not always available on buses or in subway stations.
Finally, broadband is critical for business. Businesses are expected to be able to communicate over the internet, to be able to send and receive proposals and presentations and invoices.
Broadband is good for America. A recent report from the Pew Internet and American Life Project, Broadband’s Impact on Citizen Engagement, said that people who have broadband are more likely to vote. I would add that they are also more likely to make informed decisions when they vote. The report said that people with broadband are more likely to interact with their representatives and to know about their own community.
During this recession, broadband is critical. A recent report from Pew, The Internet and the Recession, said that 69 percent of Americans have used the internet to cope with the recession, 88 percent of internet users. Americans have sought information about jobs, investment strategies, housing, and more.
14 percent of those interviewed had lost a job during the recession.
The Pew Internet and American Life Project is a great resource for researchers on a budget. While research organizations like Gartner and Forrester and Yankee Group charge for the insights they deliver, Pew is free. I strongly recommend it, especially to students.
Who Has Broadband?
Rich people have broadband. According to Pew’s Home Broadband Adoption 2009 report, 63 percent of adult Americans have broadband at home.
Surprisingly, the average price of that service has risen from $34.50 in 2008 to $39 in 2009, an increase of over 10 percent, faster than inflation and particularly surprising in an industry driven by deflationary economics.
Pew also reported that the recession will prevent some people from upgrading from dialup to broadband, exacerbating the digital divide.
Universal Broadband in the U.S.:
A Problem and a Proposed Solution
The rate of growth of broadband is the Leichtman Research Group.
The broadband stimulus is the government’s solution to this problem. The FCC has allocated $7.2 billion to improve access to broadband in poor and rural areas.
But there are doubts about this strategy. In broadband, the U.S. is 15 years behind South Korea. One attendee at Saturday’s event, Regina Walton, writes that the speeds don’t tell all of the story: Korea’s utilities also provide — gosh — customer service. As this map from the BBC shows, several other nations around the world are also ahead of the U.S. in broadband speeds.
Australia’s ILEC recently rejected the policies of an imported American CEO, Sol Trujillo, and its new CEO admitted that Telstra had lied to regulators under Trujillo. Phone companies can change and start telling the truth. This is a developing story, one to watch. I expect Australia’s broadband speeds to improve markedly as Telstra becomes more like a utility and stops the dirty tactics.
Other nations provide a good example of what not to do. Canada has just allowed the Bell company there to restrict the broadband speeds of not only its own customers but also the customers of its competitors. Canadian Regulators Send Another Love Letter To Bell Canada warned DSL Reports’ Karl Bode. Bode is a strong advocate for consumer rights and his reporting is bolstered by the massive DSL Reports community that frequently alerts him to stories that others are not covering.
In the UK, a lax regulator (one that occasionally delivers good decisions, but too rarely) has allowed just four companies to own over 90 percent of the broadband market. According to Dave Burstein, an experienced commentator on the telco side of broadband, the regulator in the UK needs to take a close look at the price at which bandwidth is sold to ISPs.
Broadband Pricing
For details on bandwidth pricing, see yesterday’s post, Prof. Andrew Odlyzko’s screed against DPI
Look at that chart, and you can see why Verizon the phone company wants to become Verizon Wireless (plus, maybe, the professional services of Verizon Business).
The current pricing scheme — anywhere in the world — is largely determined by regulation, and the U.S. could do much better.
Internet Regulation
The FCC has embraced net neutrality, the common carrier credo that all internet traffic should be treated the same in order to avoid problems such as those caused by the railroad robber barons when they decided which farmers could deliver their food to the market, or by Western Union when it refused to carry telegraph news reports if they concerned Democrats. Modern analogs to these issues exist on the internet, such as when Verizon refused to carry the message of an abortion rights group a few years ago.
Where net neutrality is a band aid, structural separation is a solution. If you separate the provider of internet bandwidth from the provider of content and services, then the provider of bandwidth will gain nothing from favoring some content and services over others. Although this solution is working in most of the high bandwidth nations of the world, the Obama administration is unwilling to try it in the U.S.
The Obama administration is trying to do one thing right: crack down on the influence of lobbyists over laws that affect everyone. However, the FCC has been criticized for hiring a lobbyist to develop its broadband plan.
The FCC and the U.S. need you to keep an eye on them.
Conclusion: Broadband is a Utility, not a Luxury
Broadband is the key to accessing services that are becoming a vital part of everyday life at a point when the country is challenged by a recession and requires an informed and active electorate. It is vital to finding a job. It is the key to telework. It is useful in interacting with the government, from obtaining forms to contacting your representatives. It is useful for everyday things such as obtaining a bus schedule and reading the news.
It can even help you read this presentation and access the slides that I made for it.
Yet the importance of broadband is not well recognized. The music industry want to deny it to people accused of wrongdoing under the Digital Millenium Copyright Act (DMCA), the only law in the U.S. where people are guily until proven innocent. Even those who were accused of downloading music but were able to prove they did not have a computer had to “settle” with the Recording Industry Association of America (RIAA), because the DMCA violates basic and established principles of justice and common law.
Similarly, there is no guarantee that the Obama FCC will behave in an enlightened manner. It could be captured by lobbyists, just like Canada’s CFTC.
Broadband is not a luxury. It is a necessary component for success, but there are no guarantees that the government, lobbyists, or corporations will do the right thing. It’s up to you.