Mike
I disagree with you here. Whatever else one may think about the ITU, it remains a key standards body. ITU sets the international standards for DSL and many other products.
When a manufacturer's patent is included in a standard, it could be a license to print money. The supposed solution is to require everyone involved to license patents in a "reasonable and non-discriminatory" manner.
In practice, neither U.S. standards groups like ATIS and the ITU itself do essentially nothing to enforce the requirement of "reasonable" and throughly unreasonable charges are added to many products. This is anti-competitive. More important to me is that it raises consumer prices.
I therefore believe that the standards bodies should take active steps to ensure the charges are "reasonable." A logical first step is set a definition of "reasonable" charges as a % of product price.
For example, if the target is set at 10% and there are 50 patents involved, any company seeking more than a fraction of one percent would have an extreme burden of proof. In the current system, we often have companies looking for 2-10% royalties on minor elements, enough to raise prices significantly.
You reported the problem well, and suggested many sensible ways forward. I think any responsible standards group should jump in and do what it takes to keep royalties reasonable.
Thanks for staying on top of this. Important things occurring. There's a war on between those who want the current U.S. "multi-stakeholder" model and other nations that want more say in how the net is run. Like all wars, truth is the first casualty. Most of what's being written - on both sides - is seriously slanted.
To get close to the truth, we need every good reporter who can be persuaded to jump in. We also need thoughtful voices actually joining the U.S. ITAC list. Among those recently joining are three professors and a former member of the ICANN board. We don't decide anything, but I can assure you the everyone in U.S. policy is reading the list.
You're also right on target about TPP, which is scandalous in an Obama administration promising openness.
Mike
You're right on target that this wouldn't be happening if we had better competition. France and Japan have twice as many competitors as the U.S. in broadband. None of the major companies in France has any cap at all. One does in Japan, 900 gigabytes upstream, unlimited downstream.
However, the U.S. needs a different solution to this problem than competition, because it's prohibitively unlikely for the next decade. Wireless is a small factor, without the capacity for high quality video and similar that is what drives people towards these caps. The best on wall street tell me no one would finance an alternative wired network in the U.S. .I love solving problems with competition, but it isn't likely here.
If my assumptions above are accurate, how would you you deal with this problem?
I've been covering DSL since 1999 and have been looking closely at the "internet slowdown" stuff. It's an absolute and total crock, and my sources include a dozen CEOs or CTOs at the companies delivering much of the world's Internet traffic. Nearly every technical person I know (at CableLabs, Verizon, Level3, Cisco, etc.) disagrees. The people pushing the idea (besides lobbyists) are overwhelmingly without technical background.
The question is what to do about this stuff, which is powerful lobbying in some government circles, including U.K. OFCOM. A "letter to the editor" accomplishes little, even if printed. Instead, I'm suggested actually sending an email to the Editor of the Economist,John Micklethwait, which can be done in 60 seconds on his webpage, http://www.economist.com/mediadirectory/listing.cfm?journalistID=41
Be polite, indicate what relevant experience you have, and point out to him just what the most important technical mistakes in the piece. and suggest that someone with more technical knowledge review that reporter's work regularly. Ask for a brief reply on how the magazine is following up, and whether they will print a better informed articla on the topic.
I don't know Micklethwait personally, but every journalist I know wants to get their facts right.
Send a copy to me, if you like (daveb at dslprime com,) and I may forward it to some other contacts journalists care about (Poynter).
SK is trying to solve the problem of a stagnant Korean market because literally almost everyone in the country has a mobile. They have competition preventing price increases or any other way to increase revenue.
I'm not surprised they are thinking of investing in the U.S., one of the less competitive wireless markets. They have invested heavily in China Netcom and if I remember right I've seen their traces in Vietnam and India. Very competent outfit.
Donahue I've only met a few times, but he struck me as a very competent, hands on guy. Yuki at the Washington Post had a similar takeaway, "Nextel is still the smallest of the six national wireless carriers, but it is the most profitable. Its customer loyalty ranks second only to that of giant Verizon Wireless. ... Early in Nextel's history, cellular investor Craig O. McCaw and his family put $1.1 billion into the company and infused it with a fighting spirit by bringing in "guys who knew how to compete," said William E. Kennard, former FCC chairman and a member of Nextel's board. Those fighters included Donahue and former Nextel chief executive Daniel F. Akerson."
Most of the Sprint leadership I've met has been megacorporate wimps who rose in a bureaucracy. That's not what they need.
To my amazement, 90% + of the report is sensible and even interesting research. If only USA Today had actually read the 70 page report and understood what it implied.
Johna very clearly says she is not predicting an "internet collapse". Instead she's saying that some things we like to do on an unfettered Internet - like sending grandma the actual DV video from a $400 camera - probably won't occur.
She's probably right about that. AT&T has made very clear they do not intend to offer more than 1 megabit uploads to most customers for at least a decade. The download will probably be so slow that if you wanted to watch 3 programs on your TVs in the normal quality of 2012 (HD), it may not be possible. Cable may or may not implement the full DOCSIS 3.0 and will have similar limits.
There were some unguarded comments in the report that can't be sustained, but most of it is a plausible projection of how much bandwidth people would like to have compared to the likelihood of getting those speeds with the current investment by companies like AT&T. She's almost surely right about that, while wrong about any substantial slowdown.
The most visible reporter took the story from the press release, which was clearly skewed. Then he got even the press release wrong in the second sentence of the article. If it weren't that his paper is in the middle of layofs, I'd be making him look very dumb to his editors.
The report has become a tool of unsupportable AT&T propaganda. But after reading it, I'm reporting it a different way - AT&T Funded Reports Criticizes AT&T for Insufficient Investment.
That's much more accurate to the substance of what is there, but not visible until you've read 60 pages (and perhaps interviewed the auther, an acquaintance.) The bad reporting means DSL Reports and now Techdirt had to refute it, and I'm wasting time on similar.
Time to call to task reporters who print too much corporate spin. As well as the money the carriers spend on lobbying and elections. It's literally in the hundreds of millions.
db
Mike's comment "So, the real debate (which Thierer ignores) is whether or not there's real competition in broadband access." makes good sense. But Tim's thought "The ultimate solution here is to find ways to enhance competition in the broadband market" is impractically Utopian.
For the next decade or more, most of the U.S. is likely to have only two successful high speed suppliers, telcos and cablecos. There's overwhelming evidence their competition is real but limited, including prices far higher than countries with more competition (France, Japan, now UK).
Wireless service is great for mobility, where it's taking over for wired phone service for many people. But it's at best a partial substitute. As Stagg Newman (ex-FCC chief technologist and now a wireless specialist) explains, there simply isn't enough capacity in typical spectrum allocations to match DSL and cable speeds. Wireless towers with today's economics need to support thousands of people, but can only offer a shared effective bandwidth of 20-40 megabits. That means that a wireless service with substantial usage can't offer most users megabit speeds. As DSL and Cable go to 10 and even 50 megabits, that makes wireless a poor substitute and very weak competitor. Great to have connectivity everywhere, but wireless is too slow for most homes as the Internet becomes "fast enough to watch".
The other possibility, new wired networks, is even less likely. I asked Simon Flannery of Morgan Stanley, one of the best U.S. analysts, whether there was any chance of another wired network being funded in the U.S. for the foreseeable future. "No" was his simple answer.
I love to solve problems through competition but the U.S. for the foreseeable future will essentially have 2 1/2 broadband competitors, not enough. That could be changed through serious unbundling or structural separation, but neither is likely in the U.S.
Which leaves the U.S. the choice of either more regulation or something close to an unregulated monopoly. For seven years we'd essentially had the later, with results you've often reported.
It's time to face up to the choice, rather than dreaming of competition that isn't abuilding.
"Part of the problem is that the FCC wants to put all sorts of rules on the spectrum usage" sounds reasonable, but in the real world is probably off target. There's very good reasons to put rules on spectrum, and it's one of the few tools available. Until spectrum sharing becomes the norm, spectrum is short and a few companies are exercising undue power. Cognitive radio technology is close, and can open things up, but until then, certain rules make sense to me.
For example, AT&T and Verizon would simply outbid everyone else in the 700 megahertz auction, buying spectrum they don't need, just to keep out competitors in wireless. That may not work in the long term, but since we went from six to four wireless companies prices have actually gone up and the "producer surplus" increased by easily $4B a year. The access terms you're indirectly criticizing were designed to discourage those two from keeping others out.
Looking a little deeper, the incumbents are collecting an economically wasteful "rent", even though much of their spectrum came to them free. Using spectrum policy to bring in more competition could dramatically lower consumer prices. I think that's worthwhile.
If I weren't on deadline, I'd feed you more data. Please look at this one more closely. db
Mike
I also get swamped by releases, but think that as a journalist it's fair to send them to me. I actually glance at most of them in my field (telecom, etc), and often find a nugget along the way.
I take the position that anything in a widely distributed press release is not news, however, and rarely report what they want me to cover. My definition of news is something my readers aren't likely to know, and they can get the press releases directly.
Occasionally, I get a solid story from a release, as I did today. A small company I never heard of introduced a repeater that extends the range of DSL, an important topic for anyone who cares about broadband for everyone. I probably wouldn't have noticed them if they hadn't put out the release.
You still have a delete key, after all.
db
Techdirt has not posted any stories submitted by Dave Burstein.
Great if ITU can make patent charges reasonable
Mike
I disagree with you here. Whatever else one may think about the ITU, it remains a key standards body. ITU sets the international standards for DSL and many other products.
When a manufacturer's patent is included in a standard, it could be a license to print money. The supposed solution is to require everyone involved to license patents in a "reasonable and non-discriminatory" manner.
In practice, neither U.S. standards groups like ATIS and the ITU itself do essentially nothing to enforce the requirement of "reasonable" and throughly unreasonable charges are added to many products. This is anti-competitive. More important to me is that it raises consumer prices.
I therefore believe that the standards bodies should take active steps to ensure the charges are "reasonable." A logical first step is set a definition of "reasonable" charges as a % of product price.
For example, if the target is set at 10% and there are 50 patents involved, any company seeking more than a fraction of one percent would have an extreme burden of proof. In the current system, we often have companies looking for 2-10% royalties on minor elements, enough to raise prices significantly.
You reported the problem well, and suggested many sensible ways forward. I think any responsible standards group should jump in and do what it takes to keep royalties reasonable.
WCIT coverage
Thanks for staying on top of this. Important things occurring. There's a war on between those who want the current U.S. "multi-stakeholder" model and other nations that want more say in how the net is run. Like all wars, truth is the first casualty. Most of what's being written - on both sides - is seriously slanted.
To get close to the truth, we need every good reporter who can be persuaded to jump in. We also need thoughtful voices actually joining the U.S. ITAC list. Among those recently joining are three professors and a former member of the ICANN board. We don't decide anything, but I can assure you the everyone in U.S. policy is reading the list.
You're also right on target about TPP, which is scandalous in an Obama administration promising openness.
You're absolutely right
AT&T's charges
Mike
You're right on target that this wouldn't be happening if we had better competition. France and Japan have twice as many competitors as the U.S. in broadband. None of the major companies in France has any cap at all. One does in Japan, 900 gigabytes upstream, unlimited downstream.
However, the U.S. needs a different solution to this problem than competition, because it's prohibitively unlikely for the next decade. Wireless is a small factor, without the capacity for high quality video and similar that is what drives people towards these caps. The best on wall street tell me no one would finance an alternative wired network in the U.S. .I love solving problems with competition, but it isn't likely here.
If my assumptions above are accurate, how would you you deal with this problem?
Dave Burstein
Fixing Economist mistakes
Folks
I've been covering DSL since 1999 and have been looking closely at the "internet slowdown" stuff. It's an absolute and total crock, and my sources include a dozen CEOs or CTOs at the companies delivering much of the world's Internet traffic. Nearly every technical person I know (at CableLabs, Verizon, Level3, Cisco, etc.) disagrees. The people pushing the idea (besides lobbyists) are overwhelmingly without technical background.
The question is what to do about this stuff, which is powerful lobbying in some government circles, including U.K. OFCOM. A "letter to the editor" accomplishes little, even if printed. Instead, I'm suggested actually sending an email to the Editor of the Economist,John Micklethwait, which can be done in 60 seconds on his webpage, http://www.economist.com/mediadirectory/listing.cfm?journalistID=41
Be polite, indicate what relevant experience you have, and point out to him just what the most important technical mistakes in the piece. and suggest that someone with more technical knowledge review that reporter's work regularly. Ask for a brief reply on how the magazine is following up, and whether they will print a better informed articla on the topic.
I don't know Micklethwait personally, but every journalist I know wants to get their facts right.
Send a copy to me, if you like (daveb at dslprime com,) and I may forward it to some other contacts journalists care about (Poynter).
Comment corrected
SK has invested in mobile company Chian Unicom, not in China Netcom.
Apologies for my mistake. db
SK's strategy and Donahue
Mike
SK is trying to solve the problem of a stagnant Korean market because literally almost everyone in the country has a mobile. They have competition preventing price increases or any other way to increase revenue.
I'm not surprised they are thinking of investing in the U.S., one of the less competitive wireless markets. They have invested heavily in China Netcom and if I remember right I've seen their traces in Vietnam and India. Very competent outfit.
Donahue I've only met a few times, but he struck me as a very competent, hands on guy. Yuki at the Washington Post had a similar takeaway, "Nextel is still the smallest of the six national wireless carriers, but it is the most profitable. Its customer loyalty ranks second only to that of giant Verizon Wireless. ... Early in Nextel's history, cellular investor Craig O. McCaw and his family put $1.1 billion into the company and infused it with a fighting spirit by bringing in "guys who knew how to compete," said William E. Kennard, former FCC chairman and a member of Nextel's board. Those fighters included Donahue and former Nextel chief executive Daniel F. Akerson."
Most of the Sprint leadership I've met has been megacorporate wimps who rose in a bureaucracy. That's not what they need.
Your close reader
Dave Burstein
Report not as bad as the news reports
To my amazement, 90% + of the report is sensible and even interesting research. If only USA Today had actually read the 70 page report and understood what it implied.
Johna very clearly says she is not predicting an "internet collapse". Instead she's saying that some things we like to do on an unfettered Internet - like sending grandma the actual DV video from a $400 camera - probably won't occur.
She's probably right about that. AT&T has made very clear they do not intend to offer more than 1 megabit uploads to most customers for at least a decade. The download will probably be so slow that if you wanted to watch 3 programs on your TVs in the normal quality of 2012 (HD), it may not be possible. Cable may or may not implement the full DOCSIS 3.0 and will have similar limits.
There were some unguarded comments in the report that can't be sustained, but most of it is a plausible projection of how much bandwidth people would like to have compared to the likelihood of getting those speeds with the current investment by companies like AT&T. She's almost surely right about that, while wrong about any substantial slowdown.
The most visible reporter took the story from the press release, which was clearly skewed. Then he got even the press release wrong in the second sentence of the article. If it weren't that his paper is in the middle of layofs, I'd be making him look very dumb to his editors.
The report has become a tool of unsupportable AT&T propaganda. But after reading it, I'm reporting it a different way - AT&T Funded Reports Criticizes AT&T for Insufficient Investment.
That's much more accurate to the substance of what is there, but not visible until you've read 60 pages (and perhaps interviewed the auther, an acquaintance.) The bad reporting means DSL Reports and now Techdirt had to refute it, and I'm wasting time on similar.
Time to call to task reporters who print too much corporate spin. As well as the money the carriers spend on lobbying and elections. It's literally in the hundreds of millions.
db
Competition unlikely in U.S. Broadband
Mike's comment "So, the real debate (which Thierer ignores) is whether or not there's real competition in broadband access." makes good sense. But Tim's thought "The ultimate solution here is to find ways to enhance competition in the broadband market" is impractically Utopian.
For the next decade or more, most of the U.S. is likely to have only two successful high speed suppliers, telcos and cablecos. There's overwhelming evidence their competition is real but limited, including prices far higher than countries with more competition (France, Japan, now UK).
Wireless service is great for mobility, where it's taking over for wired phone service for many people. But it's at best a partial substitute. As Stagg Newman (ex-FCC chief technologist and now a wireless specialist) explains, there simply isn't enough capacity in typical spectrum allocations to match DSL and cable speeds. Wireless towers with today's economics need to support thousands of people, but can only offer a shared effective bandwidth of 20-40 megabits. That means that a wireless service with substantial usage can't offer most users megabit speeds. As DSL and Cable go to 10 and even 50 megabits, that makes wireless a poor substitute and very weak competitor. Great to have connectivity everywhere, but wireless is too slow for most homes as the Internet becomes "fast enough to watch".
The other possibility, new wired networks, is even less likely. I asked Simon Flannery of Morgan Stanley, one of the best U.S. analysts, whether there was any chance of another wired network being funded in the U.S. for the foreseeable future. "No" was his simple answer.
I love to solve problems through competition but the U.S. for the foreseeable future will essentially have 2 1/2 broadband competitors, not enough. That could be changed through serious unbundling or structural separation, but neither is likely in the U.S.
Which leaves the U.S. the choice of either more regulation or something close to an unregulated monopoly. For seven years we'd essentially had the later, with results you've often reported.
It's time to face up to the choice, rather than dreaming of competition that isn't abuilding.
db
Competition unlikely in U.S. Broadband
Disagree about spectrum use
Mike
"Part of the problem is that the FCC wants to put all sorts of rules on the spectrum usage" sounds reasonable, but in the real world is probably off target. There's very good reasons to put rules on spectrum, and it's one of the few tools available. Until spectrum sharing becomes the norm, spectrum is short and a few companies are exercising undue power. Cognitive radio technology is close, and can open things up, but until then, certain rules make sense to me.
For example, AT&T and Verizon would simply outbid everyone else in the 700 megahertz auction, buying spectrum they don't need, just to keep out competitors in wireless. That may not work in the long term, but since we went from six to four wireless companies prices have actually gone up and the "producer surplus" increased by easily $4B a year. The access terms you're indirectly criticizing were designed to discourage those two from keeping others out.
Looking a little deeper, the incumbents are collecting an economically wasteful "rent", even though much of their spectrum came to them free. Using spectrum policy to bring in more competition could dramatically lower consumer prices. I think that's worthwhile.
If I weren't on deadline, I'd feed you more data. Please look at this one more closely. db
I welcome the press releases
Mike
I also get swamped by releases, but think that as a journalist it's fair to send them to me. I actually glance at most of them in my field (telecom, etc), and often find a nugget along the way.
I take the position that anything in a widely distributed press release is not news, however, and rarely report what they want me to cover. My definition of news is something my readers aren't likely to know, and they can get the press releases directly.
Occasionally, I get a solid story from a release, as I did today. A small company I never heard of introduced a repeater that extends the range of DSL, an important topic for anyone who cares about broadband for everyone. I probably wouldn't have noticed them if they hadn't put out the release.
You still have a delete key, after all.
db