Wednesday, April 02, 2008

America's Internet Future Looking Like Its Past

So much for a cheaper, faster and more open Internet?

With news that AT&T and Verizon have just won the most significant chunks of available wireless spectrum, Americans face a future of more of the same: slower Internet speeds for prices that are far higher than what many people pay in Europe and Asia.

VerizonThe Home of the Internet?
And without action to restore Net Neutrality protections, the Web we get may be blinkered by phone and cable companies' ability to restrict the content and applications we may want to use.

Earlier this year, Verizon and AT&T plunked down a combined $16.3 billion for the largest blocks of licenses to use the public spectrum up for sale on the "700 band."

When Congress authorized this auction, their stated intention was to pry open our cell phone and broadband markets to consumer choice and new competition. But having Verizon and AT&T control the most significant chunks of the spectrum -- including the so-called national C Block -- means more of the same for Internet users.

At the moment, U.S. Internet users face a broadband duopoly where nearly 99 percent of all residential connections are provided by incumbent cable or phone companies. The wireless spectrum that went up for bid represented a new way to get high-speed Internet services to millions of Americans.

And it couldn't come at a more crucial time. The cost of broadband in other countries continues to drop dramatically while speeds have increased. But U.S. consumers still pay more -- 10 to 25 times more on a price per megabit basis than broadband users in Japan -- and get less.

Verizon and AT&T are already among the most dominant providers of "wired" broadband access in the U.S. Their victories over the bulk of 700 MHz licenses leave slim prospects for genuine Internet competition via a wireless "third pipe."

The Mobile Web on Hold

The popularity of the iPhone gave us a limited glimpse of the democratic potential of a mobile Internet. Imagine a time when people are able to connect to the high-speed Internet wherever they are and without any restrictions to the content they chose to pull off and push onto the Web.

The technology is already available -- and so are the airwaves that could connect people on the go. But the giant incumbents would rather erect more toll booths and roadblocks than let us have a truly open Internet in our pockets. Sadly, our bureaucrats and elected officials seem content to let them have their way.

With the auction news, we just lost an opportunity to take the mobile Web to the next level and do something really innovative with our last, best spectrum.

Verizon's stance against Net Neutrality -- combined with its censoring of cell phone text messages "for any reason or no reason" -- means the newly won C Block will likely not become the haven for free speech and openness that many had hoped to see.

And don't expect either Verizon or AT&T to do anything in the wireless space that threatens their status quo of control over the wired broadband market. Why would they build cheaper and more open mobile networks that could cannibalize their legacy land-line businesses?

What's Next

In response to public pressure, the Federal Communications Commission will require Verizon to allow any device or software application on its network.

This is a positive first step toward new wireless innovation and openness. And the billions brought into the Treasury by this auction – double congressional estimates -- prove wrong the industry Cassandras and shills who claimed that open spectrum protections would dampen demand, drive down the price and scare away bidders.

But Verizon and AT&T likely paid so much for this spectrum for other reasons. They didn't do so to bring to the market new and open innovations at low prices; they did it to protect their market power from a new ideas and competitive threats.

To keep pressure on the incumbents we need to continue to press for openness and innovation -- not just via this new spectrum but over all of our wireless networks.

Last year, the Internet phone company Skype filed a petition at the FCC today asking that the agency ensure that any users of mobile devices has the freedom to communicate over all wireless networks.

This petition has important ramifications for all of us who want to carry the Internet in our pockets via hand-held devices that connect us to broadband in the same way we do via our home computers -- without the interference of wireless gatekeepers who can unilaterally determine what devices and applications can function on available wireless networks.

This is a revolutionary idea. But without public and political pressure, I expect very little change to the closed and predatory approach taken by the likes of Verizon and AT&T.

Moreover, these deep-pocketed incumbents will always win access to our public airwaves under these sorts of auctions.

We need to rethink the ways we dole out licenses in ways that will allow upstarts and innovators to enter the marketplace and break up the slow-moving broadband cartel. It's time we unlocked our spectrum so users can enjoy the future of the Internet today.

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