The following was originally published yesterday in my weekly newsletter, A-Clue.Com. I would be delighted to have you subscribe. Always free.
Do We Need To Care About The Internet?
No. (This is what the Internet looked like, within the African nation of Togo, back in 2000. It is much, much bigger now.)
Caring about the Internet as a whole is like caring about the PC or caring about the idea of a car. The technologies are mature, and they will continue to progress whether or not you’re part of it.
But PCs need the Internet just as cars need roads. The better the Internet they have, the fatter the pipes and the freer the service, the better PCs can serve their users. Again, think of a car. A car on a two-lane pot-hole filled highway in the Amazon isn’t going to do as much for you as the same car riding 80 mph down an American freeway. It’s not going to go as fast, the mileage will be poorer, the wear and tear will be greater.
On the Internet your PC will "go" only as quickly as the slowest link between you and what you want. If the server you’re on is being hammered service will degrade. (I just spent a half-hour trying to get two simple pages to download from npr.org – I don’t know why.) If a router is slowed somewhere, or your signal is going through an over-used NAP (Network Access Point), your service will be degraded. If there’s a virus on your system, your service will be degraded.
But the most common reason service is degraded is your local link. It’s the "first mile" problem.
Right now the U.S. has a duopoly in the first mile. Cable companies and Bell companies own it. They are hoarding over 99% of the available Internet capacity on their lines, and claiming that, if given control of content as well, they will meet 10-year old promises to upgrade with fiber. Oh, and when they do upgrade with fiber they’ll cut out the copper, and force customers to use it, on their terms, in perpetuity.
This is a scandal. It is an unprecedented sell-out of the public interest to the private interest. The Bells, in particular, have used a combination of defiance, stalling, legal manuevering, political contributions, and phony "consumer groups" and "think tanks" to achieve their position.
Sound familiar? This is precisely what the Bush-era conservatives have done to achieve their political power. It’s no coincidence that the monopolists and the Bush people are attached hip-and-thigh. But while our political views might change, leading to new policies by a new government in Washington, that is unlikely in the broadband area. That’s because the Democrats are as thoroughly bribed by the Bells as Republicans are, and because people care less about the issue of their Internet driveways than they do about, say, war, the budget, and the roads their cars drive.
Yet, after weeks debating these questions through a list put together by Gordon Cook of the Cook Report, Bruce Kushnick found himself facing a consensus of opinion that it doesn’t matter.
It doesn’t matter because of Moore’s Law.
Universities, enterprises, and government long-ago discovered that they can build-out their own networks for much less than it costs to rent them from the phone companies. If you’re on a college network, if you’re in a hospital, if you work at a Fortune 500 company, chances are you’re not just using what the phone or cable company offers. You’re on an island of speed, with direct connects to nearby fiber, everything running from your LAN to the Internet cloud at lightspeed, perhaps going even faster within the LAN.
If you’re walking about the campus on this island of connectivity, you are also in good shape. You’ve probably got a fast, secured WiFi network you can access from your notebook. In China, India, Japan and Korea, Linux-based cellphones now combine with these networks to provide instant, mobile connectivity on such islands.
The problem lies in extending the reach of these islands into the
community. There, WiFi and WiMax can do a good job. The equipment
needed for truly fast wireless connectivity gets cheaper all the time.
Right now, for instance, you can go to a store and probably get an
802.11n router which can run at up to 100 Mbps.
Of course, you won’t really get 100 Mbps service from it. Somewhere
there will be a bottleneck. It might be in your PC, or it might be in
the wireless link, or it might be somewhere that wireless link hits the
phone company’s monopoly.
Eliminating these bottlenecks, delivering the promise of "Pentium 4"
broadband, is possible. It takes a mere effort of will on the part of a
community, or a college, or a corporation, to make things happen. The
cost of this, as I’ve said, continues to decline. Moore’s Law of Fiber
makes these internal networks infinitely upgradeable. Moore’s Law of
Radios makes extending them cheaper and more efficient all the time.
This doesn’t mean you shouldn’t care about Internet issues, or about
the need to break the Bell monopoly, its stranglehold on last-mile
bandwidth. You should. You’re the victim of their monopoly. Your
ability to compete in the world economy is degraded by their greed.
But because all I’ve written before is known to investors, the Bells
and cable operators are not profiting from their monopoly, or their
hoarding. Look at a five year chart for Verizon. Look at the same chart for
AT&T.
This is despite their monopoly, and despite their growing wireless
businesses.
In the end the market will destroy the Bells, just as democracy will
destroy the Bushes. So long as both continue to operate, eventual
change is inevitable.
But that doesn’t mean you don’t, as a citizen and an investor, have an
obligation to help things along a little bit. You can avoid the stock.
You can seek alternatives for your Internet connection. You can agitate
against the phone company’s interests in your state capitol, you can
fight bandwidth hoarding and remind your local officials of what
Moore’s Law is doing.
These are the obligations of an investor, a customer and a citizen. If
you want the forces of history to accelerate, just a little bit, then
fulfill your obligations.
