Look outside your window (or check the manhole cover down the street). Not just anyone can hang a wire on that pole or drag one underground -- a wire that eventually connects to your house. The electric company can. The cable TV company can. And so can the telephone company -- a.k.a. your local "Baby Bell." In the old days, with few exceptions (satellite TV being one), these three utilities' access to the pole outside your home or business (known as "right of way") equated to legal monopolies that regulators have tried to manage with creative lawmaking. For example, those who own the wires may have at some point in time been required to make those wires available to competitors. If you put a power generating windmill in your backyard and you had power left over at the end of the month, the electric company might be required to buy that surplus back.
But, now, with the cable TV guys into offering telephone service and the electric guys promising high speed Internet access, and who-knows-who-else looking for ways to blast a WiMax signal to your house, the wire owners have been forced to diversify into each others' business. OK, well, the cable and phone guys won't be delivering kilowatts any time soon. But, you get the picture. The competition has intensified, not to mention the pressure that Voice over IP is putting on one of the businesses that almost everybody is into: traditional telephony service. Feeling the heat, the Baby Bells, who still rely heavily on that business, recently got a get out jail free card whenthe FCC declared Internet Service Provision an "information service" that doesn't trigger the regulation requiring Baby Bells to share their right of way or their wires with Internet Service Providers (ISPs) like Earthlink and AOL. If those companies were in the business of traditional telephony (as defined by regulation, not as defined by technologies like VoIP), it might have been a different story. But they're not and the ruling equates to a reprieve for the Baby Bells whose own infrastructures were being used against them by the customers of those ISPs who were using VoIP instead of dial tone telephony. (Have you Skyped recently? I have.)
If bandwidth was an incredibly precious commodity that wire owners needed to allocate sparingly, then the new regulations come across as being reasonable. After all, even with the government sanctioned right-of-way that their competitors don't have access to, why should the Baby Bells be forced into letting their limited assets get used against them? But according to Bob Frankston, famous for co-inventing the electronic spreadsheet and now looking to fix the many things that are broken with the Internet (a subject for a another blog, or probably a podcast), the Baby Bells' assets are anything but limited and the current "Regulatorium" has produced a situation whereby the Baby Bells are not only able to deny competitors the right of way access they deserve (which in turn would create more competition for our dollars), but are also artificially denying consumers access to the gigabits of bandwidth that's waiting just outside their doors. Ultimately, this sad state of affairs is holding back the true potential of the Internet, stifling innovation in the process. By Frankston's calculations, for example, Verizon is reserving 99 percent of its government-ordained right of way (in the form of bandwidth that should be available to us as well as its competitors) for itself so that it may compete in the IPTV market.
You could take Verizon's side on this. After all, where Frankston and I live (Massachusetts), for those of us not on a satellite system, the wire that most of us connect our TV sets to belongs to a cable company (Comcast) that also has right of way and that's aggressively competing with Verizon to be both my telephony and internet service provider. It's only fair that Verizon get to reserve a substantial portion of its government-ordained right-of-way so two can play that game (and Verizon can take on Comcast in the the video on demand business). Right? But what if Verizon's removal of 99 percent of its bandwidth from its "books" -- a removal that's leaving us with a mere 15 mbps of connectivity when we could have gigabits of it -- is coming at the expense of something more important. Much more important. Wrote Frankston of the FCC decision that cleared the way for Baby Bells to do this:
By treating the Internet as a service rather than fundamental and vital connectivity, we cannot use it as the basis for new services such as medical monitoring and emergency communications......When carriers talk about broadband, they are referring to the fiber technology of which they share only 1%. When the FCC justifies a broadband policy, it classifies anything slightly better than dial up a broadband so it can claim that we are not behind countries offering consumers 100mbps services and above. As long as the FCC fails to understand the concept of connectivity as fundamental infrastructure, it will act little more than a shield for the carriers.....With 99% of the capacity of these networks off the books, it will take decades to catch up with countries that already provide 100 mbps and even gigabit access to homes.
But, even more important to Frankston was that he heard Verizon President Ivan Seidenberg made a promise -- a promise that he's still hoping will be kept.