Tuesday, June 03, 2008

The Cure for America's Internet

You can see them parked outside of libraries and coffee shops in towns scattered across the hills of Western Massachusetts. They're identified by the blue glow emitting from inside their cars.

Across the state, 95 towns have limited or no access to high-speed Internet. People in Massachusetts' more rural western half have had to resort to a game of Internet hide and seek -- searching out wireless hotspots, laptops plugged into car lighters and nestled in their laps.

Road to Nowhere

Building the Net Superhighway

Maureen Mullaney of Ashfield, Massachusetts, lives in one of these under-served towns. She seeks out these roadside hotspots so her children can do research for school projects. "How silly is it that in this day and age you have to get in your car, drive to the general store so your daughter can researchers the rivers and traditional clothing of Chile?" she asks.

"Even if every person in my town is screaming out loud for high-speed Internet that would still just be 1,800 people."

But Maureen and her neighbors are not alone. While a generation of Americans can barely remember life without a Google search at our fingertips, millions of households still can't send an e-mail, let alone pay bills online, check the weather or conduct research for school.

A Broadband Backwater

The shortcomings of the U.S. broadband market are tremendous - more than 10 million U.S. households remain un-served, while nearly 50 million homes are priced out of subscribing to broadband services - and the social and economic consequences are dire.

Late last month, yet another global survey confirmed this, showing the U.S. to be more of an Internet backwater than a world leader. According to the Organization for Economic Cooperation and Development (OECD), Internet access and services in America have slid to 15th place among 30 developed nations, a drop from our 12th place ranking in 2006, and from fourth in 2001 when the OECD began its international survey.

In real terms this means Internet users in Japan pay little more than half the price (65 cents to the dollar) for an Internet connection that's 20 times faster than what's commonly available to people in the United States.

Yet people in the U.S. are still stuck off the grid, or with unreliable and slow dial-up, with little relief in sight.

A Man, No Plan, The Internet

The reasons for America's digital decline are many. But first is this: Other developed countries have enacted comprehensive national plans to connect more of their citizens to a fast, affordable and open Internet. The U.S. stands alone among OECD countries without a national broadband program.

We do have national broadband rhetoric, though -- and an army of well-heeled apologists to trumpet "successes" and gloss over problems. And the damage is now beginning to show.

In 2004, President Bush pledged "to have a universal, affordable access for broadband technology by the year 2007."

As if on cue, last year, Mr. Bush's chief Internet officer John Kneuer declared "Mission Accomplished" -- that all the international surveys were misleading and that the "free market" had ensured that Americans across the country enjoy real choice in high-speed internet access.

The Hand of the Duopoly

Kneuer's Pontius Pilate approach is now familiar to the Bush administration -- America's problems will disappear with a wave of the magical hand of the free market.

What he and his White House compatriots refuse to acknowledge, though, is that a free market approach for Internet services in the U.S. is a chimera. The only hand in play here belongs to the phone and cable duopoly, which controls broadband access for more than 98 percent of homes.

The net effect of this duopoly is a dearth or real choices; allowing providers like AT&T and Comcast to exact high prices from Internet users, while delivering connections that are too slow -- and, often in the case of cable, too congested - to meet growing demand.

The market imbalance is beginning to take its toll. A Brookings Institution study counts 300,000 new American jobs each year for every 1 percent increase in broadband adoption.

Larry Page, Google's co-founder and president, put it a different way. "We're pretty far behind and for us it's a big problem because we have our main headquarters in the U.S. and our employees have only a one megabit service," he told me during his recent visit to Washington.

"If we're thinking about building the next generation of Internet services they're not going to be on one megabit services, they're going to be 100 megabit services and we're not going to end up developing those... In terms of the U.S. being competitive, it's very important for us to be leading that rather than following. And we show no signs of being able to do that."

Free Market Mumbo Jumbo

Our inability to truly wire the nation is itself the result of poor policy decisions. For decades, U.S. communications legislation has been held captive by lobbyists working for--you guessed it-- the phone and cable companies.

These Internet service providers are among the most prolific spenders in Washington. They spend hundreds of millions of dollars on lobbyists, campaign contributions, P.R. firms and paid junkets to help ensure that special rules are written in their favor.

For all their talk about the free market, the cable and telephone giants work aggressively to force through regulations that protect their market duopoly, close the door to new market entrants and competitive technologies, and increase their control over the content that travels across the Web

Japan Pries Open Its Market

In 2000, Japan faced a similar dilemma -- an Internet industry stifled by the heavy hand of a few network gatekeepers. But the government responded by pulling together the nation's leaders from the pubic and private sector to launch an "e-Japan strategy" aimed at connecting 40 million of Japan's 46 million households within five years.

The Japanese government quickly moved to create a highly competitive private sector by compelling regional telephone companies to open their residential lines to wholesale access by other competitors. They also adopted policies to prevent the type of online discrimination that has reared its head recently in the U.S.

In 2001, Japan counted only 2.2 broadband subscribers per 100 inhabitants. By mid-2004, ultra-high-speed broadband connections were available to more than 80 percent of Japan's citizens. By 2006, Japan declared that it had surpassed the broadband goals of e-Japan and was ready to launch its next national strategy, called "u-Japan". The "u" takes the nation's broadband beyond "ubiquitous," to become "universal," "user-oriented," and "unique."

Getting Behind a Big American Idea

Free Press' own research found that most of the countries with similar universal and open access policies had nearly twice the level of broadband penetration as those that did not.

The OECD seems to agree. "Governments providing money to fund broadband rollouts should avoid creating new monopolies," according to its report summary. They recommended that any public broadband infrastructure "should be open access, meaning that access to that network is provided on non-discriminatory terms to other market participants."

Public policy should be designed to make it profitable for corporations to behave in ways that better serve both the free market and the public interest. And we're seeing more and more from international examples that that requires a shared vision with a light but clear legislative touch. (This issue will be widely discussed this coming weekend as Internet activists, visionaries and innovators come together in Minneapolis at the National Conference for Media Reform).

When President Eisenhower set Americans to work building the nations' Interstate Highway System he mobilized members of Congress from both sides of the aisle to appropriate federal funds and create corporate incentives for the construction of 41,000 miles of new roads. It was the largest infrastructure project in American history to that point, but the $25 billion in federal money set aside to build the nations main arteries yielded an almost immediate return to our nation's economy.

The construction of a universally accessible Internet superhighway ranks as important today, and it can be accomplished with even stronger collaboration between the public and private sector.

Future policymakers who are serious about America's well-being should learn from our failings and from success in other countries so we can deliver the vast benefits of an open connection to every American. It's time we started construction.

(photo Courtesy of Pete and Genevieve on Flickr)