[IP] more on why should we ever trust corporation -- BP Named in Inquiry on Pricing - New York Times
Begin forwarded message:
From: "Faulhaber, Gerald" <faulhabe@xxxxxxxxxxxxxxxxx>
Date: July 2, 2006 2:19:28 PM EDT
To: "Robert J. Berger" <rberger@xxxxxxx>
Cc: Dewayne Hendricks <dewayne@xxxxxxxxxxxxx>, David Farber
<dave@xxxxxxxxxx>
Subject: RE: [IP] more on why should we ever trust corporation -- BP
Named in Inquiry on Pricing - New York Times
Well, I'm a little agnostic about muni wifi; for several reasons, I
think it is an idea with very limited application, and it could well
get us into trouble as a technology that could block new and better
technologies as they come onstream later (including fiber). Where it
makes sense (small towns without BB coverage, for example) it's a
great idea. But in other areas (such as Philadelphia) I am much more
dubious. In Philly, I am expecting the SEPTA of broadband;-) I
haven't cancelled Comcast, and I don't think I ever will.
I believe your comments about the viability of BB entry are likely
correct. But the message here is that the BB market is much more a
niche market than us geeks would like to acknowledge. In fact, less
than a third of HH actually have BB, and less than 3/4 even have
computers. If BB were as popular as, say, cable TV, the economics
would be far different. If we only have two providers (and it is not
clear they are making money on this product at this time; certainly
Wall Street is not rewarding them), maybe that's because the market
is really pretty small.
Should the state provide BB nationwide as pure infrastructure?
Probably our very best infrastructure project in the US has been the
Interstate Highway System; if we could do that well with BB, I'd be
for it. But I am deeply suspicious of gov't providing anything
competently these days; even hurricane relief and overseas
intelligence seems to be beyond our capabilities. Perhaps in some
universe, this would be a good idea. But in the US we live in today,
I am very skeptical that the Feds wouldn't screw it up royally.
Professor Gerald Faulhaber
Business and Public Policy Dept.
Wharton School, University of Pennsylvania
Philadelphia, PA 19104
Professor of Law
University of Pennsylvania
From: Robert J. Berger [mailto:rberger@xxxxxxx]
Sent: Sunday, July 02, 2006 2:06 AM
To: Faulhaber, Gerald
Cc: Dewayne Hendricks; David Farber
Subject: Re: [IP] more on why should we ever trust corporation -- BP
Named in Inquiry on Pricing - New York Times
So we should make sure that if there is any telecom regulation bills
passed soon, that at a minimum it should include provisions that make
sure that no laws can be passed and any laws in existence can not bar
municipal or other competitors to the incumbents.
Right now 15 states have laws that bar Municipalities from offering
telecom, fiber or Internet services.
Also it should be noted that current (or anything on the drawing
board that can fit anywhere in our current spectrum regulatory
environment) wireless can not compete with fiber to deliver true
broadband (10 Mbps or greater dedicated per household ) to dense
urban or suburban environments.
There are no technologies around right now that allow real
competition to the oligopoly of Cable and Telco that can be deployed
by stockholder funded corporations. The up front cost is too high and
the time to Return on Investment of capital is nearly infinite based
on the revenues that can be collected. The only business plan that
can overcome its is one that comes up with a MAJOR physics
breakthrough like quantum communications.
In the meantime, the common good of fiber deployment to or near the
home is high. Thus municipal deployment of dark fiber plant or a
regulated layer 1 (dark fiber) only monopoly with cost+ open access
to fiber is the sane way to do this. Then you can have vibrant,
competitive layers 2 - 7 marketplaces on top of the "public roadways"
of dark fiber joined together by the commonality of the end-to-end
IP protocol.
On Jun 29, 2006, at 1:24 PM, Gerald Faulhaber wrote:
Begin forwarded message:
From: "Faulhaber, Gerald" <faulhabe@xxxxxxxxxxxxxxxxx>
Date: June 29, 2006 3:55:14 PM EDT
To: David Farber <dave@xxxxxxxxxx>
Subject: RE: [IP] more on why should we ever trust corporation --
BP Named in Inquiry on Pricing - New York Times
Migod, a virtual lovefest between Dana and me; I'm deeply disturbed by
this;-)
Of course I agree; let's do everything we can to increase the
supply of
broadband and the "cartel" (actually, a duopoly; no evidence of price
fixing, I believe) will fall on its own. That has always been the
objective of those (such as myself) arguing for platform competition.
Abundant supply is the killer of market power; always has been, always
will be.
In recent IP correspondence, I suggested that the primary
responsibility
for increasing the supply of last-mile broadband lay with the IP
readership!! New entry in broadband will come when smart
entrepreneurs
(i.e., IP readers) figure out how to bring BB to households
competitively: Craig McCaw's Clearwire, BPL, WiMax (forever the
next big
thing),... The technologies are out there; what we need are guys with
business plans. Some have argued the "guys with business plans"
should
be municipal gov'ts and/or communities, and I say fine, bring 'em
on (to
paraphrase Dubya). But sitting around on our duffs whining about
duopolies and complaining to Congress is not going to increase the
supply of BB. It's only going to increase the supply of whining and I
think we have quite enough of that already.
Professor Gerald Faulhaber
Business and Public Policy Dept.
Wharton School, University of Pennsylvania
Philadelphia, PA 19104
Professor of Law
University of Pennsylvania
––––––––––––––––––––––––––––––
Robert J. Berger - Internet Bandwidth Development, LLC.
Voice: 408-882-4755 eFax: +1-408-490-2868
http://www.ibd.com
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