The sorry state of American telecom

The sorry state of American telecom

Summary: Thomas Bleha, recipient of an Abe Fellowship and a former Foreign Service officer in Japan for eight years, published an article in the May/June edition of Foreign Affairs where he warns America that its broadband and wireless technology failures could have high costs in the future due to lost opportunities for economic growth, increased productivity, and a better quality of life. (A recent News.

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TOPICS: Broadband
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Thomas Bleha, recipient of an Abe Fellowship and a former Foreign Service officer in Japan for eight years, published an article in the May/June edition of Foreign Affairs where he warns America that its broadband and wireless technology failures could have high costs in the future due to lost opportunities for economic growth, increased productivity, and a better quality of life. (A recent News.com report details the conflicts between local governments and commercial carriers.) Bleha's warning is not surprising. Countries with advanced broadband and wireless networks will be the places where broadband and wireless product innovations will occur. This is less of a problem for large, international companies, but a big problem for small to medium-sized American companies, as Bleha explains:

Although many large U.S. firms, such as Cisco, IBM, and Microsoft, are closely following developments overseas and are unlikely to be left behind, the U.S.'s medium-sized and smaller firms, which tend to foster the most innovation, may well be.

The reasons for Japan's success, according to Bleha, were strong government financial incentives, such as tax credits and subsidies for network rollout, mandatory open access rules to regional telephone lines, and public enthusiasm for new technology. He considers America's de-emphasis of line-sharing rules in favor of relying on platform competition (cable versus phone line, as an example) a mistake because it is unlikely, in his opinion, to lead to rapid increases in broadband speed due to vested interests in the status quo:

Cheap, high-speed broadband would lead to widespread use of Internet telephones and thus threaten the phone companies' lucrative voice-telephone business, and more inexpensive broadband would multiply outside video and movie offerings and endanger the cable companies' profitablity.

I'm glad that more are starting to awaken to the fact that America's telecommunication situation is a mess that needs to be fixed. I had better broadband service when I moved to Lausanne, Switzerland, a quaint little city on the banks of lake Geneva, than I did in Boulder, Colorado, where it wasn't even available in 2000. Even more embarassing is the fact that Canada, a nation far more spread out than the U.S., is far ahead in the broadband race. We can't just blame it on our size.

I don't, however, agree completely with Bleha's identification of the nature of the problem, nor with his prescription for a solution. More on that tomorrow.

Topic: Broadband

John Carroll

About John Carroll

John Carroll has delivered his opinion on ZDNet since the last millennium. Since May 2008, he is no longer a Microsoft employee. He is currently working at a unified messaging-related startup.

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4 comments
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  • Bleha is right on the money....

    However, it's not that broadband "SPEED" is so much the problem as is true broadband competition. Basically, there is cable and there is DSL, if you're lucky. If you're not that fortunate, you have even fewer choices, especially in regards to price.

    Why should anyone have to pay $45 to $60 a month to get onto the internet (with broadband that is)? Personally, I view that as being obscene.

    A country such as ours should be a leader, not a laggard. Yet, we continue to create government mandated monopolies and then allow those monopolies to contribute heavily to politicians. Yes, that is indeed a "vested interest in the status quo". "You keep giving me money, and I'll keep trying to help you retain your monopoly."

    If you wonder why we are behind the rest of the world, let me say to you, "Duh"!
    shawkins
  • Minor quibble

    Canada's a pretty bad example of being 'more spread out' than the US; while the US has population centers from Seattle to San Diego to Boston to Miami, 90% of the population of Canada is within 160km of the US border. And since broadband penetations isn't anything close to 90% (not above 30% anywhere), I don't think you can read anything into the concentration of Broadband access in the Northwest Territories from these figures.
    xxyl
    • Point taken

      I would say, perhaps, that based on urbanization ratios which are mostly the same in both countries, we are at least CLOSER to Canada, from a broadband difficulty standpoint, than Japan/Korea. That's why I think it's fair to compare the two countries and ask why America is doing so badly while Canada isn't.
      John Carroll
  • Telecom Industry

    Yes, I think the telco industry is a mess. However, some companies are starting to get it right. I have been dealing with MCI for about 8 months now and I have never been happier with the level of customer service and products that they have. My company has approx. 6 T1's with them and a PRI circuit. The nice thing about MCI is that they concentrate on their core buisness rather than trying to do 100 different things.

    I have been dealing with telco companies for about 13 years now. I would rank my experience with the following as:

    1. MCI
    2. ELI
    3. XO
    4. SBC
    5. Verizon
    6. Qwest (US West) (absolute worst!..we are no longer in there terrority so I do not deal with them as much).

    As for a solution, I do think tax incentives to both the telecom providers and the end-users would be beneficial to growing our country's data infrastructure.
    mktexpress