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Innovation

There is a simple answer to the broadband shortage

Unfortunately the Obama Administration seems unwilling to directly challenge the monopolists who took away our early Internet lead in the name of profit.
Written by Dana Blankenhorn, Inactive

Competition.

Unfortunately the Obama Administration seems unwilling to directly challenge the monopolists who took away our early Internet lead in the name of profit.

The National Broadband Plan is a 376-page monstrosity that pays lip service to the economic growth of  ample Internet access, but never addresses the central point.

Countries that followed our 1996 Telecommunications Act in building out their Internet infrastructure -- requiring wholesaling of last-mile capacity -- let their citizens buy a lot more bits, for less, than we do.

What happened in the U.S. was that the Bells -- Verizon and AT&T -- were allowed to overturn that regime by claiming that wholesaling cable was "technically impossible" (it's not) -- and then were allowed to buy a controlling interest in your electromagnetic spectrum.

Put simply, the commons was sold and the rest is being run the way John D. Rockefeller ran Standard Oil. By the way, after Standard Oil was broken up Rockefeller's wealth increased five-fold. Wealth also increased after the 1984 Bell break-up, and reversed after the monopoly was allowed to re-create itself.

There is a lesson here. What is good for industry and what industry wants is not always the same thing. Sometimes they're the opposite. It's fun making money without working, but we don't need corporate welfare queens.

The first headline on CNN's coverage of the plan was "No Easy Fix for America's Broadband Troubles." That's false -- there is an easy answer. This was changed to "FCC Feels the Need for Internet Speed."

The FCC feels it but they are unwilling to demand it. Instead they want more subsidies for the incumbents -- $15 billion -- and for broadcasters to make a killing selling the same incumbents more frequency spectrum. It's a recipe for disaster.

The industry funded "Internet Innovation Alliance" released a statement saying the goals of the plan can be achieved "provided strict new regulations are not imposed to undermine investment." This is like the fox saying the chickens will prosper if only you unlock the gates to their cage at night.

But it's regulation that is most needed. Antitrust regulation. Demand wholesaling of the last mile. Free up more spectrum for services like WiFi, which are regulated based on equipment standards. Stop selling our patrimony to members of the "Internet Innovation Alliance" and allow for some real innovation.

That's what other countries do. They follow our example from the 1990s, not the stupidity that has replaced it.

Until the Obama Administration is willing to confront the monopolists who are strangling our Internet, we are going nowhere. No matter how much money we spend. Because it's not "us" -- the government -- that needs to be spending the money here.

It's "them." The carriers. They need their incentives changed so it is in their best interest to spend that money. The market is broken. Fix it, don't feed it.

This post was originally published on Smartplanet.com

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