How Can the Stimulus Plan Help the Internet? 154
Wired is running an article raising the question of how a US economic stimulus plan could best help broadband adoption and the internet in general. We discussed President-elect Obama's statements about his plan, which would include investments in such areas, but Wired asks how we can avoid the equivalent of the New Deal's "ditches to nowhere" without more data about where the money would actually make a difference. Quoting:
"... the problem is that no one knows the best way to make the internet more resilient, accessible and secure, since there's no just no public data. The ISP and backbone internet providers don't tell anyone anything. For instance, the government doesn't know how many people actually have broadband or what they pay for it. ... In September, the FCC found that its data collection on internet broadband was incomplete and thus ruled that AT&T, Qwest and Verizon could stop filing some reports — because the requirements did not extend to cable companies, too."
AT&T (Score:2, Interesting)
Because we need telephone to reach the poor and the rural communities... Because market is failing to address this need...
We must centrally plan this vital piece of national infrastructure. (Oh, and Libertarians are all lunatics.)
Re:Premise guarantees failure (Score:3, Interesting)
Re:Premise guarantees failure (Score:5, Interesting)
Exactly. The consumer will direct the market based on the availability of competing, cheaper services.
The $200 billion that the telecoms got in the 1990s to wire America was squandered, and very little was actually done with it (arguably kept prices for existing services at the same level instead of having them go up, but not more than that).
This is where municipal government--boroughs, villages, city sections--could play a hand in essentially buying groups--"aggregate individual choices"-- for broadband service, but still allow residents to choose their own provider.
Slashdot's short memory (Score:3, Interesting)
For instance, the government doesn't know how many people actually have broadband or what they pay for it
Wait, I thought telcos giving the government open access to their records was a bad thing.
Come'on folks. You know anything the government touches will be abused. Stop giving these appointees more power for next to no real gain.
LAST MILE, LAST MILE, LAST MILE (Score:3, Interesting)
It is ridiculous that we let the telcos drag their feet so much.
We need to understand the failure of the Clinton/Gore attempt to wire the country with fiber, and make it happen for real. This will mean a lot of shared sacrifice for the local phone monopolies.
Just say NO (Score:2, Interesting)
I guess the bank bailout, auto bailout, hedge fund bailout (it's coming), and credit card bailout (it's also coming) aren't enough, we need a pork bailout (aka "stimulus").
Remember the .bomb bubble? People bought overpriced stocks on the theory they'd be even more overpriced later. That didn't work out, so to soften the landing, the federal reserve kept interest rates low, which moved money into housing.
Remember the housing bubble? People bought overpriced houses they couldn't afford on the theory that they could sell it for even more before their interest-only mortgage came due. That didn't work out, so to soften the blow, the president, congress, the treasury, and the federal reserve borrowed trillions to bail out dying companies on the theory that they had to do something, even if it was stupid and not well thought out.
The federal government (and debt apologists) have justified excessive borrowing and spending on the theory that it will grow the GDP. That's the same kind of thinking that caused these problems for individuals and the economy as a whole. History has shown that you (we) will need to pay for it eventually, and it won't be pretty.
Don't let the ILECs ruin it (Score:4, Interesting)
The problem with current telecom policy is that it presupposes that the old incumbent telephone companies (ILECs) "own" the wires that they installed with monopoly-ratepayer money, but due to the presence of nominal competition (cable), they no longer need to be regulated as utilities. So giving them more money simply raises their profits. It raises the price they pay to buy each other up. Right now the going rate is around $3000/subscriber to buy up a rural telephone company that gets >50% of its revenue from government subsidies. They're simply bidding on the present value of these entitlements. It goes straight to the investment bankers (Goldman Sachs has been making a lot off of the subsidized-ILEC business.)
The FreePress plan is awful too. It simply ignores the ILEC networks and supposes that a few billion dollars could create a "third path", another closed, propertarian network. Of course they also want Internet content to be regulated, so their plan loses on both angles. They just hate the cable industry and collaborate with the Bells against it, consumers being a low priority.
So what might work? I suggest that the feds use the money to finance the spin-out of the ILECs' outside plant -- the loops and short-haul links between their central office buildings -- into neutral "LoopCos". They would provide wholesale access to any LEC, ISP or cableco, including their former owners, on vendor-neutral terms. LoopCos would be strictly regulated utilities (like telcos 25 years ago), forbidden from competing with their customers. Then the stimulus money could be used to finance (low interest loan, subsidies in high-cost areas) an upgrade of their legacy networks to provide (dark) fiber to the home.
The old legacy LEC (ATT, VZ, Q) shareholders would win, because a lot of their debt would move to the LoopCos, where it would be diluted by stimulus money. The Internet and its users would win because we'd have real open-entry competition, not a duopoly.
Lay fibre (Score:4, Interesting)
The government should get fibre to every home. Doesn't matter if they do it or they help/force the incumbent telco or a cable provider to do it, it is just what the economy needs.
It would stimulate the construction industry. Lots of digging and laying cables, building up local offices.
It would help IT with new equipment being required and migration of customers from older systems.
It would help broadband companies who now have a new, faster platform to sell.
It would bring new business opportunities like HD video on demand, DVD/BluRay download stores, even more random TV channels etc.
In the long run, it will bring the country into the 21st century.
Your deffinitions presume your conclusion (Score:4, Interesting)
This is undoubtedly true, as long as you define "rational and efficient" in terms of the non-colluding well informed self interested rational agents that make up this hypothetical market. It's the same as saying:
So, obviously, true.
But if the assumptions behind this implicit definition break down--if the market participants are themselves irrational, inefficient, short sighted, gullible, or just too damn busy to read every piece of fine print they are faced with--then your conclusion falls apart. The market will become unstable and result in a few players subjugating all the rest, and the system as a whole will cease to do anything beyond satisfying the whims of its masters.
Unless you are foolish enough to fancy yourself as one of the eventual masters, you should not be rooting for this outcome.
--MarkusQ
P.S. One way to resolve the problem is to impose some sort of progressive dampening on the system which recirculates wealth. But doing it by fiat (e.g. welfare) generally damages the value of the currency (loosely, why work if you can get money for free?) so demanding something in exchange (job creation programs) is much better. Even better is when these programs can produce something of lasting value, and better still if it's something of widely acknowledged long term value that "the market" would never have produced since it wasn't in anybody's short term interest.
Fixing our infrastructure, obtaining energy independence, building a permanent moon base, bringing global CO2 levels back to normal, any of these things would be ideal--no private entity could accomplish them, but collectively we could, and be much better for it.
Government isn't the solution.... (Score:3, Interesting)
...government is the problem.
Government regulation and got us into this mess. There is no reason to believe that more of it will get us out.
Who do economic stimulus plans really help? (Score:3, Interesting)
My unscientific analysis caused me to conclude that the intent of economic stimulus plans is to help the wealthiest people get back on their feet, so that then they would once again feel generous enough to not fire people or reduce their wages and the like (a sort of reverse trickle-down, if you will). Us poor folks are supposed to be thankful for their crumbs and hand-me-downs, so we should rush to send them gifts when they're not feeling the love? Doesn't that sound a bit like the baronies our ancestors were trying to escape in the first place?
I refused my $300 stimulus check from the IRS early this year, for exactly this reason on principle: it wasn't really intended to help me in the first place. I despise disingenuousness [disingenuity?], especially if it's perpetrated by my own government.
I frankly don't see what such an economic stimulus plan has to do with furthering broadband availability. It sounds like someone promoting their own brand of pork.
Sometimes it is investment in novel bussiness (Score:4, Interesting)
We wasted huge sums of cash in the 90's, but we came out the other end with many profitable long term ventures that set up growth or the US economy. Of course some people, comfortable with their 10 million dollar a year jobs did not embrace such a path to growth, and spent most of the past decade fighting or perverting the change that would cost them their jobs and often fraudulent pay checks, so the path to the next big thing is not clear. It never is, especially when we just do the same old thing . What is clear is that we are wasting out money helping old line and fraudulent businesses [nytimes.com]. For instance, for the amount of money we are giving to the automakers, who knows how much will just go to bonuses, and accounting costs for the planned elimination of half the line workers jobs, we could have a lottery to give away coupons for 80% discounts on American cars for at least 200,0000 people, thus clearing the backlog. You see, innovative ideas for innovate futures, but of course such an idea has not bonuses for the bosses.
The United states has technology for renewable energy, but very little money. Someone is going to make a lot of money on this, and the oil comapanies will lose a lot of money, unless they stop selling buggy whips. Even now I wonder if there is well in the US that can be profitably drilled for $40 a barrel. Someone is going to make a huge amount of money delivering content using TCP/IP, but the broadcasters and cable will lose money, unless they get off their butts and do it. The nice thing about this is that the middle man can be cut out, and the US can distribute to the world, if we have the bandwidth to not only deliver such content to the US population, but also to the world, which we don't.
I don't know what else the US can do, but it has to be more than selling poorly engineered cars and fraudulent financial services. Of course a work ethics that promotes such innovation will have to encouraged, which means that some of he easy jobs, the ones like the we heard about prior to the collapse of the USSR where people got paid to sit around, play chess, and drink vodka all day, will have to go.
Stimulate my what? (Score:2, Interesting)
The stimulus plan will go the way of the last cash-injection-for-infrastructure... it will disappear down a lot of corporate rabbit holes and the U.S. will still have substandard broadband.
I wonder if we will receive any disclosure as to the recipients, or will it be another "disappearing money" trick like the $700 billion shenanigans.
Re:The best way to help... (Score:3, Interesting)
I am very sorry for the people, you know, I feel terrible that such bad times are coming. But they are coming, there very very close and no amount of regulation and spending by the government can do anything about it.
Government can never do anything about economy except for making things worse. For some reason, which still eludes me, many people believe that government must have a role in economy. This is perplexing, after all, the government is not supposed to be a for profit outfit. They are supposed to do things that will not normally be done by private enterprise, for example building interstate roads and such (I am not American, I can't be certain of all the things that government really is doing in the States.)
One of my points is that it is nonsensical to expect any entity in this world to be able to control the uncontrollable. Economy is like weather, it has a billion variables and they all change all the time. Economy is not a static system, it is constantly changing. Any new born human, any new store, any closing restaurant, any new shipping company, any new invention, any new efficiency, any war, any incident, all of those things have an effect, nothing can control those incidents.
But on the grand schema of things, you know, on the macro-economic level, the government can do things. Bad things. They do them for their own purposes with their own understanding. Artificially pushing interest rates down, printing new fiat dollars, removing the backing of the dollar by the gold, coming up with legislation for 'fairness'. Attempting to meddle with economy in any way, will always always always always always be to the detriment of the economy.
Now, government can force environmental standards, prohibit illegal use of monopolies for killing competition and such. This is also detrimental in one sense, but can be beneficial in another. However flooding market with phony dollars, that is definitely going to have a detrimental effect.
Imagine this: the dollars are understood to be phony by the outside to the US world. The world that lends money to the US. US owes tens of trillions in debt and this debt cannot be repaid.
From point of view of a single citizen (you know, they used to be citizens before they were all changed to consumers), this is a catastrophe. No more money is given on credit, whatever can be borrowed will have enormous interest rate. If the interest rate is not pushed up, the dollar will fall to 0. Simply to 0. It will happen the way it happened in many countries for the past 100 years.
Imagine buying a loaf of bread for $100 in the morning, and by the evening realizing that now bread costs $1000. $10000 in 5 days from then, $1,000,000 in a month, $1,000,000,000 in half a year. That is not impossible. That is what happens when government gets their hands into economics. They don't actually understand economics, even worse, it is not in their best interests to act upon understanding of economics.
Don't expect a man to understand something, is his job relies on not understanding it.
So why am I saying this? Well, recession is here. Government will attempt to maintain the phony dollar and will create hyper-inflation by pushing interest rates down. People will freak out and will stop buying everything except food and probably energy (you know, for heating and such.)
Goods will become scarce, as lender countries will stop lending. The problem is, once they stop lending, the US will have nothing to buy outside products with. This is bad news, at that point it is going to be a depression and probably a deflation of resources and goods that are of not essential value (not food).
In a situation like this the following will happen:
1. Government will fix prices. Obviously this will cause shortages, nobody in their right mind will want to sell for nothing. USD will be nothing.
2. Shortages will cause panic and probably hunger and anger.
3. Whoever has any means left will attempt to flee the country. O
Re:Premise guarantees failure (Score:3, Interesting)
The best answer would be a network of last mile fiber and a mesh of inter area fiber. A nice thing about fiber is that it can carry many channels at different wavelengths at the same time. Perhaps a default frequency would peer you with the government provided ISP but leave the option to use other frequencies to connect up with various private carriers you might sign up with.
So, much like you sign up for cable internet or DSL and they send you a 'connection kit', you sign up for fiber internet and they send you an appropriate GBIC. With the right gear, you could connect to more than one and use policy routing. The idea being to route around any government or corporate damage.
The recent debacle of the NSA conducting domestic spying with the help of telecoms providers and current events in Australia demonstrate that leaving it to private corporations doesn't necessarily grant us uncensored and unmonitored communication anyway.
As long as private contracts with ISPs are not forbidden as part of the rollout, a public internet access option can help you even if you don't use it simply by setting the bar. If the public ISP will give you 50Mbps for $10/month, other providers would have to fall in line to compete. They couldn't likely go cheaper, so they'd have to offer some combination of less censorship or greater bandwidth if they wanted to stay in business.
No data? (Score:2, Interesting)