Whither the Fiber-Optic Future?

31 Jan ’06

Steve Stroh posts on a new book by Bruce Kushnick that he describes as a history of a massive bait and switch campaign in the 1990s by the US telcos using the pretext of a national fiber optic buildout as a basis for increasing their rates. Gist:

Bruce Kushnick has written a new book, $200 Billion Broadband Scandal, that details a truly massive bait and switch campaign by the major US telephone companies. What the major US telephone companies promised in the buildup to the 1996 Telecommunications Reform Act was fiber to every home with symmetric 45 Mbps speeds, and a continuation of their historical open access model. They asked for, and got, rate increases to pay for the fiber upgrades. The work should have been completed by 2006… do you have your 45 Mbps symmetric fiber optic service with your choice of ISPs?

None of us do. Those few that do have fiber have 30 Mbps asymmetric for $200 or so per month, with no competitive choice of ISP services on that fiber. What broadband service most of us have from the phone company (those that haven’t defected to cable modem service) is at best 3 Mbps asymmetric, with a rapidly shrinking pool of choices of ISP services.

Troubling suggestions, if true.

Update (2006-02-01): Mathew has uncovered more coverage (Gordon Cook here, Richard Stastny here, and David Isenberg here) of Kushnick’s new book, and notes the tie-in to telecom claims in the current net neutrality debate: “And it definitely sheds a different kind of light on their repeated claims that Internet content companies should be paying more for access to their pipes … It sounds to me like U.S. consumers have already paid for it several times over.”

The book now has a blog here. Journalist Dana Blankenhorn has an excellent post there titled “The Internet Necessity“. A brief extract:

A few years ago some wags talked about people having a “right” to Internet service, and they got laughed at.

Let’s try it another way.

America’s economic future requires every citizen have access to Internet resources, and full freedom to use them.

Everyone needs Internet access, and literacy, to be part of the modern world.

This is the Century of the Mind. We’ve already seen business gravitate to those cities with the best connectivity, with the best chances for minds to connect. That’s what Silicon Valley is about. That’s what Boston is about, what New York is about, what Atlanta and Austin and Washington are about. Connections. But with the Internet it’s not just cities which are judged on their connectivity. It’s nations. And we’re falling behind.

Already, just in the last few years, we’ve fallen to 19th in broadband penetration. We’re about to be passed by Slovenia, for God’s sakes! Slovenia! Slovenia was, in the 1990s, part of Yugoslavia, a country which destroyed itself in civil war. Now Slovenia is passing us in the access its citizens have to the Essential Resource of our Time.

Why is this?

Simple. We’ve allowed Internet service to be monopolized by two sets of companies – Bell companies and cable operators – who are paying for obsolete infrastructure, who are forcing us to pay for that infrastructure before they deliver more, and who think only in terms of billing for specific services, not selling bits.

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