Wednesday, December 22, 2010

Internet Monies



It's probably about time that everyone comes to the realization that when a Republican speaks in apocalyptic, hyperbolic admonitions about the ramifications of a given public policy, we should rush to do the complete opposite:

McConnell (R-Ky.) also signaled the GOP will attempt to block such rules in the next Congress. "Today, the Obama administration, which has already nationalized health care, the auto industry, insurance companies, banks and student loans, will move forward with what could be the first step in controlling how Americans use the Internet by establishing federal regulations on its use," said McConnell.

While arguing against net neutrality, McConnell relied on the very same rhetoric about a free and open Internet that is used to bolster it, exploiting the confusion that surrounds the issue.

[...]

McConnell warned that regulating the Internet could reduce investment. "This would harm investment, stifle innovation and lead to job losses. That's why I, along with several of my colleagues, have urged the FCC chairman to abandon this flawed approach. The Internet is an invaluable resource and should be left alone," he said. "Many Americans will wonder as many already do if this is a Trojan horse for further meddling by the government. Fortunately, we'll have an opportunity in the new Congress to push back against new rules and regulations."

McConnell's statement is so full of fail that it's hard to know where to begin. Outright, repeatedly and objectively debunked lies notwithstanding, McConnell has now added government regulation of the internet (net neutrality) to his list of evil librul boogeymen that are going to single-handedly savage our economy and push unemployment up to 20%. Specifically, McConnell claims that any sort of FCC regulation on the internet would stifle innovation, kill jobs, and discourage investment, and that the internet ought to be left alone. I think we all know how well things work when private industry is left to its own devices or laughably, to 'self-regulate' (see financial crisis/Wall Street, Massey Energy, British Petroleum). It doesn't fucking work. It never has, and it never will. But aside from that, what about the standard Republican claim that any government regulation will lead to job/investment/innovation killing?

Japan has surged ahead of the United States on the wings of better wire and more aggressive government regulation, industry analysts say.

[...]

In 2000, the Japanese government seized its advantage in wire. In sharp contrast to the Bush administration over the same time period, regulators here compelled big phone companies to open up wires to upstart Internet providers.

In short order, broadband exploded. At first, it used the same DSL technology that exists in the United States. But because of the better, shorter wire in Japan, DSL service here is much faster. Ten to 20 times as fast, according to Pepper, one of the world's leading experts on broadband infrastructure.

Indeed, DSL in Japan is often five to 10 times as fast as what is widely offered by U.S. cable providers, generally viewed as the fastest American carriers. (Cable has not been much of a player in Japan.)

[...]

Perhaps more important, competition in Japan gave a kick in the pants to Nippon Telegraph and Telephone Corp. (NTT), once a government-controlled enterprise and still Japan's largest phone company. With the help of government subsidies and tax breaks, NTT launched a nationwide build-out of fiber-optic lines to homes, making the lower-capacity copper wires obsolete.

"Obviously, without the competition, we would not have done all this at this pace," said Hideki Ohmichi, NTT's senior manager for public relations.

His company now offers speeds on fiber of up to 100 megabits per second -- 17 times as fast as the top speed generally available from U.S. cable. About 8.8 million Japanese homes have fiber lines -- roughly nine times the number in the United States.

[...]

The opening of Japan's copper phone lines to DSL competition launched a "virtuous cycle" of ever-increasing speed, said Cisco's Pepper. The cycle began shortly after Japanese politicians -- fretting about an Internet system that in 2000 was slower and more expensive than what existed in the United States -- decided to "unbundle" copper lines.

For just $2 a month, upstart broadband companies were allowed to rent bandwidth on an NTT copper wire connected to a Japanese home. Low rent allowed them to charge low prices to consumers -- as little as $22 a month for a DSL connection faster than almost all U.S. broadband services.

[...]

As the United States drifted, a prominent venture capitalist in Japan pounced on his government's decision to open up the country's copper wire.

Masayoshi Son, head of a company called Softbank, offered broadband that was much cheaper and more than six times as fast as NTT's. He added marketing razzmatazz to the mix, dispatching young people to street corners to give away modems that would connect users to a service called Yahoo BB. (The U.S.-based Yahoo owns about a third of it.) The company's share of DSL business in Japan has exploded in the past five years, from zero to 37 percent. As competition grew, the monthly cost of broadband across Japan fell by about half, as broadband speed jumped 33-fold, according to a recent study.

QED, and that article is even three years old. Here you have a prime example in Japan, under similar circumstances to the US (albeit a decade ago, sadly), effectively using government regulation to revolutionize an industry and transform it into a global leader. The end result was faster speeds, lower prices, better technology, superior innovation, and yes - more jobs. The unbundling of Japan's broadband infrastructure and low rents made it possible for the supposed Republican free market Jesus, small businesses, to enter the industry. All of this was forced by regulation, and it created a better outcome for everyone.

But McConnell and his caucus are not interested in these outcomes. They want the status quo - for telecom giants like AT&T & Comcast to have a virtual monopoly and to be free to continue to gouge its customers at the highest possible prices that the market will bear. For all their love and worship of the free market, their actions declare the exact opposite: they don't want competition, lower prices, better access, or more choices for consumers, because Republicans don't promote capitalism, but plutocracy in its purest form. And they continue to promote this perverse agenda through their fear mongering language and warnings of government takeovers that a good 40-50% of the Fox News loving populace actually believes.

I know that facts, data, and empirical evidence have a librul bias but I'll conclude with the following graphs from OECD. The first shows the average monthly price per Mbit/s by country, in US Dollars at purchasing price parity (PPP). The second shows the fastest broadband speeds by country (also in Mbit/s), as reported by the incumbent telecommunications operators.

Yes, you read that correctly: we pay on average approximately four times more than Japan, for speeds up to 400% slower. I guess this means all of fears have come true: the OECD has become part of the evil, librul Amurika hating agenda.

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