Lessons From The US's First Broadband Plan... In 1808

from the public-private-partnerships dept

Larry Downes has written up a long, but quite interesting, look at the FCC's proposed broadband plan by putting it into context when compared to previous major US infrastructure projects, starting with what he refers to as the US's "first broadband plan," put together in 1808 by then Treasury Secretary Albert Gallatin:
Two hundred years ago, Gallatin's proposal was audacious. The young Republic, in danger of coming apart at the seams of its already-diverse geography, should commit to building a series of road and canals to knit the continent together from the Atlantic to the Mississippi. The Gallatin Plan called for canals that would connect the inland waterways of the U.S. from Massachusetts to North Carolina, a "great turnpike road from Maine to Georgia," and improvements, including what would one day become the Erie Canal, to connect the waterways of the Atlantic with the Great Lakes.

The value of roads and canals in improving the communications, safety, and commerce of the young republic were too obvious to enumerate. Indeed, Gallatin wrote, "No other single operation, within the power of the government, can more effectually tend to strengthen and perpetuate that union, which secures external independence, domestic peace, and internal liberty."

Gallatin estimated his proposed new infrastructure would cost the federal government $20 million. In countries with a "compact population," he noted, such expenditures might be expected to come from “individual exertion, without any direct aid from the government.” But the vast geography of the United States, its sparse population, and the general poverty of many of its citizens, justified public investment. As the federal government was already in debt, Gallatin advised Congress to borrow the money from future budget surpluses in $2 million increments over a ten-year period. (The surpluses were expected to come from the sale of western lands.)
If you compare that to some of the debates over broadband policy today, you'll note some similarities. Gallatin's plan never went through directly -- instead a semi-public-private partnership was worked out instead. Downes notes how common this is when it comes to US infrastructure projects throughout history, with the interstate highway system perhaps being the one exception.

So what does all that mean? Well, the answer is tricky. Because you need some aspect of a public-private partnership to do these sorts of big infrastructure projects, but at the same time, the role of both parties becomes finely balanced. Everyone knows the larger parts: private companies provide much of the investment and the technology/manpower. The government provides the rights of way/land and potentially additional subsidies to encourage the investment. But then what? Left with too little oversight, the companies controlling the infrastructure can (and do) take advantage of their position, knowing that there's effectively limited competition to keep them in line. But, with too much oversight, things get ridiculous -- and often that oversight becomes subject to regulatory capture, where those same incumbents use the regulatory power to prop themselves up in the face of nascent competition. This was the issue with the railroads and the Interstate Commerce Commission (ICC) -- a topic that was covered in great detail in comparison with today's broadband discussions in Tim Lee's paper on net neutrality, and discussed again by Downes.

There isn't an easy answer to all of this, but what is clear is that there are important issues to be discussed. And the problem is that in the US we're not really discussing the right issues at all. Much of the focus is unfortunately on net neutrality instead of competition, and the broadband plan is more focused on adoption rates rather than actual broadband. This is a key point that gets a bit buried in Downes' piece. He talks about how the focus of the broadband plan is to increase broadband adoption in the US, but that broadband is already widely available in the US. It's just that there are lots of people who don't want it yet.

But both Downes and the FCC seem to skip over the larger issue of speed. The real problem in the US is not that we're so far behind on adoption rates -- but in what kind of broadband most people can use today. With some exceptions, it's slow. Especially compared to some other countries. And, yes, there are some issues involving population density and the ability to build out a faster network, but if the government is going to get involved, why not focus on the metric that matters: which would be the bandwidth of the network, rather than making sure that the guy living at the end of a dirt road in the middle of nowhere can get his broadband access.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Anonymous Coward, May 13th, 2010 @ 4:12am

    The first step to fixing this issue is admitting we have a problem. This can be done by enforcing laws about disclosure of the service's features. If the FTC actually held the companies to their claims (no "up to 5GB/sec!!!!!" BS), then we would realize how bad we have it. Once everyone is on board with the fact that there is a problem, then we can go about fixing it.

     

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    Dementia (profile), May 13th, 2010 @ 4:32am

    Mike, while I generally agree with most of your points, there are some of us who live at the end of the proverbial dirt road who really want high speed internet. Unfortunately, until someone forces the incumbents to build out more, either through competition or regulation, it simply won't get done. I'm fully aware that it was my decision to move to where I live, but with real competition in the market, I would probably have, at the least, higher speeds than the 256k currently available.

     

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    Anonymous Coward, May 13th, 2010 @ 5:02am

    There is no competition on the U.S. because there is no infra structure in place, it doesn't matter who build what, the end point is this. Build the damn thing first then people can fight over who will control what.

    Net Neutrality is important and it only will become with legislation it will happen one way or another the government is to power hungry to not legislate about it so if it is going to happen people should fight for the right laws at least.

     

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    RD, May 13th, 2010 @ 6:50am

    You forgot to mention that broadband in the USA is WORTHLESS if..

    And, of course, the speed doesnt matter one damn bit if the providers are allowed to institute CAPS on the "broadband." Even competition might not alleviate this, as providers are inclined to grab as much cash as they can at the expense of the customer. What good is a 50mb line if you can only download 50 or 100gb a month? Want to stream netflix? Sorry, you can only watch a few things for the first few days in the month. Want to download DLC or game demos? Sure, maybe a couple, then you are done. Want to play online games? Youtube? Pandora? Sorry, you have a cap, you cant use these services for more than a few days a month. A 1mb line with NO CAP is infinitely better than a 20mb line with ANY cap.

     

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    Rakisak (profile), May 13th, 2010 @ 7:28am

    Right now there are communities that created their own networks. I for one wish we would do that. It would create more jobs and faster and cheaper service. For example, How come comcast charges 30 a month for their phone but the magicjack is 20 a year?

    Also look at this nasty bill from NC
    http://www.indyweek.com/indyweek/hoyle-to-municipal-broadband-drop-dead/Content?oid=1422121

     

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  6.  
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    Anonymous Coward, May 13th, 2010 @ 7:51am

    Re:

    if you want higher speeds, my suggestion is that you run your own fiber into town, and get a connection. you chose to live in the middle of nowhere, it is up to you at some point to do it, rather than having the rest of the people living in the city paying a premium so you can get a connection. it is extremely unfair to other customers or taxpayers to have to pay for your lifestyle choices.

     

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  7.  
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    interval, May 13th, 2010 @ 8:13am

    Re: Re:

    Now may not be a good time to make use of socialist methods to improve the American internet infrastructure, and while I am a die-hard free market believer, there are times when it is necessary to for the entire country to shoulder the burden of bringing that infrastructure to at least the level of S. Korea (when I read the rates and bandwidth DSL subscribers in S. KOREA have I about stained my drawers). One of the single biggest social programs that brought this country to preeminence on the world stage in the 20th century was the introduction of compulsory primary education for all citizens. I think the internet is at least as important.

     

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    Anonymous Coward, May 13th, 2010 @ 8:17am

    Re:

    Least you have that, I have dial-up, 28.8kbs on a good day. The internet is almost unusable at that speed anymore. No options other then satellite, which is expensive, severely limited, and not fast enough for the money it cost.

     

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    Keybored, May 13th, 2010 @ 8:20am

    Re: end of the dirt road

    Satellite? Unless you need to connect to work via a VPN this is a great solution.

     

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    Steve R. (profile), May 13th, 2010 @ 10:57am

    Reality versus Preception

    This is a really good post that begins to explore what is below the surface of the net neutrality debate.

    First, if our free-economic system is so great, why do I hear rumblings in other posts and articles that our internet is less robust than other countries?

    Second, those who provide the internet/telecommunication services in our country whine that they need "freedom" to implement robust services. Yet they fail to provide any actual promise of commitment. Are we simply supposed magically accept the premise that "freedom" will somehow result in a robust internet? Getting back to point one, given the current "freedom" to implement, why are we apparently continuing to fall further behind? Seems that they are more about spewing out empty promises than actually providing a service.

    Third, What would be interesting to read is why the countries that are ahead of us, are ahead of us? Could it be that socialistic regulation would actually be good!!!!!!

     

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  11.  
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    Rick, May 13th, 2010 @ 11:37am

    Huh?

    My dad lives 300feet off the freeway on a paved road and can't get broadband. 2 miles away is a town of 400 people - they can't get broadband either. There might be a dirt road in that city tho...

    My sister lives on a paved street in a village of 250 people - no broadband. They are within 5 miles of two cities of 5,000 and 15,000 people and nobody outside a mile of those cities can get broadband - that's about 2000 people between them. They used to have cable TV at least - that company folded due to mis-management and theft.

    I live in that city of 15,000 and I only have one choice for broadband in my area (Charter) as DSL only covers about half the city.

    Yes, speed and competition is important, but so is availability - for everyone.

     

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    nasch (profile), May 13th, 2010 @ 1:12pm

    Re: You forgot to mention that broadband in the USA is WORTHLESS if..

    Why wouldn't competition fix that?

     

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    Chargone (profile), May 13th, 2010 @ 3:40pm

    Re: You forgot to mention that broadband in the USA is WORTHLESS if..

    come live in New Zealand for a while then.

    I'm having trouble expressing my point coherantly in ways that don't require explanation of a decade and a half or so's worth of experience, but the general lesson learned is that streaming is an idiotic proposition, websites with region locks cause rage, and that a 20mb cap will see you through a whole month quite easily if you actually stop to think about your data use.

    simple rule is: pace your downloads. the only way you're Ever going to hit that cap is through movie and game downloads. in the case of games, there's not much you can do but pace yourself and put more effort into making sure it's something you want before getting it. (the sites of publishers/developers you know make stuff you like are good places to start. well, usually.)

    as for movies: even on your PC they're the same as TV. this is using less energy than Sleeping. if you're hitting 20gig in movies a month you're either A: using a Crap method of getting them which provides insufficient compression, B: watching an excessive amount of 'tv'. download less and get another hobby to fill the space in between, or C: downloading Massively more than you will ever get to watching, and thus should just pay more attention to what you're Getting, or finally D: some combination of the above.

    i'll tell you this, also: online games? cap is meaningless, they don't shift enough data. you could play WoW, CoH, EVEonline, anything like that 24/7 for the whole month, plus patches etc, and still not hit a 20gig cap. badly designed shooters might be a different story. on the other hand, speed is a Huge Deal. lag kills (in game avatars :P )

    360 dlc and demos is typically fairly small. dunno about the PS3. rule for consoles: for the games? buy the disks. that's the whole point in the arrangement in the first place. buy disk, insert, run.

    PC demos and patches are typically highly compressed, and have content cut out of them in the first place. for 'a couple' read 'more than you're ever going to bother playing'

    if your cap is 20 gig, the only way Youtube is going to hit it is if you use it obsessively.

    your logic fails in many places.

    that said, Smart ISPs who set caps for actual reasons have two ways of dealing with you going over: one: you pay extra and gain another chunk of data. two: you get your speed throttled back to whatever the network will handle at the time (that is, people who haven't yet get priority).

    come to think of it, smart ISPs who set caps purely for profit would do it this way also. and it does help that the whole industry is well regulated to avoid price gouging.

    basically, you're complaining about a whole list of problems with caps... that aren't true for caps significantly smaller than the one's you're talking about.

    all of the above said: there is no call for data caps inside the USA other than pure profit making. unlike NZ, the resources Do exist there... the companies just don't want you to think they do :-S

     

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    Chargone (profile), May 13th, 2010 @ 3:50pm

    Re: Huh?

    i read things like this and think 'yay state regulation of infrastructure! woo!'

    it'd probably get slammed in the US as 'socialist', but NZ's broadband system developed directly from it's telecommunications system... which already went everywhere due to starting off as part of the government run post office and then getting spun off as a private company... with actual Laws passed mandating that it must provide connections to, well, everywhere... though they are allowed to charge for the excessive cost of running lines up to one random house way off in the mountains, if the owners are willing to pay, they Must build it. they Must provide free local and emergency services calls. (cellphones have to provide emergency services calls even if there's no money on them and no way to bill 'em. if the battery's charged and they can get reception on the network they're programmed for, they'll do it, near enough.)

    there's been competition introduced, and all sorts of other developments, but basically at the end of the day it goes everywhere and works Well Enough because the government beats the telecommunications companies over the head with laws and regulations every time it doesn't. (in the modern environment, competition between different entities at different levels, combined with breaking the old main company, which started of as a monopoly, into seperate bits in it's retail and wholesale capacities (the latter basically owning most of the cable in the country, though there is competition there too... and the competition is much more free with the use of fiber rather than copper :D) serves to drive improvement in quality so 'good enough' is only a base line, rather than the norm...)

    i mean, there's practical problems with doing something like this in the USA (not least that your telcos and cable companies didn't start off as a government owned monopoly :D) but still, you'd think there'd be a lesson to learn there.

    ('course, places with the population of NZ get run by mayors and city councils (or equivilants) in most places... probably not a proper city in the USA that's not bigger than this country in terms of population... which Should, one would think, make it easier... but whatever...)

     

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    nasch (profile), May 13th, 2010 @ 3:50pm

    Re: Re: You forgot to mention that broadband in the USA is WORTHLESS if..

    a 20mb cap will see you through a whole month quite easily if you actually stop to think about your data use.

    It seems from the rest of your post you meant GB, not MB. My summation of the rest of your post: if you have a cap, just don't use the internet in the way you would like to. No problem!

     

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    Chargone (profile), May 13th, 2010 @ 4:12pm

    Re: Re: Re: You forgot to mention that broadband in the USA is WORTHLESS if..

    yes. yes i did. it's called a typo. something an edit button would fix if we had them, but we don't.

    ... and the summery is more like 'most of your complaints are wrong' and 'the rest, while true, mostly require an (apparently? hopefully?) unusual degree of silliness/laziness/obsessiveness to legitimise'. plus added bonus 'price-gouging sucks'. oh, and also 'streaming is dumb if you don't live right on top of the source, and may be silly from an economic standpoint also'

    this is, of course, all assuming we are referring to normal residential household end users. it makes no sense at All otherwise.

     

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  17.  
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    Chargone (profile), May 13th, 2010 @ 4:16pm

    Re: Re: Re: Re: You forgot to mention that broadband in the USA is WORTHLESS if..

    gah. the 'you' in quotes refers to the origional post by RD, not nasch's response. sorry 'bout that.

    point was, even if you have a cap, 50 gig cap at decent speed isn't 'worthless'. it's actually pretty good. coverage and bandwidth/data/plan price are additional issues not considered in my arguments, of course.

     

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  18.  
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    Black Patriot (profile), May 13th, 2010 @ 4:48pm

    I think the ideal system is where the government owns the infrastructure and all the ISPs simply compete on distributing information over it. That causes competition between ISPs, keeping prices low and speeds high, and the government can fund investment into the speed and reach of the network, perhaps with help from the ISPs, like some sort of mandatory fee per user (like $5 a month or something).

    What the US government should do is buy all the fiber networks in metro areas and allow the local ISPs to use them. Then use the revenue from the metro areas to expand outwards into the regional areas, and develop new technology to increase the range. Not everyone needs a fiber connection to their house, we could use fiber to the center of a town then use wireless to connect the last mile to the consumers.

    Of course this all assumes that the US government can be trusted to run such a service without screwing everyone over, which doesn't make me too optimistic about the future.

    For the record, I live in Australia and we have a similar system to New Zealand, with one slight difference, no one seems to be interested in keeping Telstra (the company that owns most of the phone lines in the whole country) competitive. We made the mistake of privatizing the infrastructure itself, not just the company we'd created to run it, which has cause a huge number of problems since.

    And caps aren't as bad as they seem, my connection is about 5Mbps with a 30GB cap (it's actually 30GB peak, 30GB off-peak and 30GB uploads). We also have arrangements with other ISPs to share bandwidth and content, so I have unmetered access (doesn't count towards my cap) to a large number of file mirrors and other sites, even things like the steam library are unmetered, and some ISPs have unmetered downlaods from Xbox Live. All you'd really in the US is a local mirror for Netflix content, Xbox Live and Steam and most people wouldn't come near their caps.

     

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    Chargone (profile), May 13th, 2010 @ 5:22pm

    Re:

    pretty sure we privatized the infrastructure as well... just regulated the result into submission. also (comparatively) recently unbundled the network, too.

    amusingly, we used to have competition only for toll (long distance) calls in the form of a company called 'clear'. it was then bought up by (surprise!) Telstra, who are the ones laying the fiber and providing the cable TV. they are the competition here *grins* also the ones who finally derailed the first attempt at that stupid 3 strikes Internet piracy bill.

    so, yeah, Telstra's the competition here. should keep right on working as long as the commerce comission or whoever keeps coming down hard on anti-competative practices... (telecom split up voluntarily because of significant hints that the government would force them to if they didn't clean up their act quick smart... hehe.)

     

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