A Saturday article in the Washington Post (and PC World),Internet Capacity Could Max Out in Two Years, Study Says, expresses grave concerns that a surge in video and other technologies could overload the net within two years. The study, conducted by an “independent research firm,” says that $137 billion in new investment is needed in the next 3 to 5 years to keep up, and says that is more than twice what service providers plan to invest.
Let me urge all readers here to click on the original WaPo article and read through it from beginning to end. When you do, see if you can spot the one gigantic missing element in the story…..the elephant in the information pipe…..the reason this whole argument is a sham.
Below the fold, some very interesting details on who is behind this boondoggle, why it is a fraud,and why it could become a major weapon in the ongoing battle to eliminate net neutrality:
When big figures like $137 billion start getting tossed around, it is always worth looking at the vital question…”Who would benefit?” Sure enough, the article includes part of the answer….
The study confirms long-time concerns of the Internet Innovation Alliance (IIA), an advocacy group focused on upgrading U.S. broadband networks, said Bruce Mehlman, co-chairman of the group. The group, with members including AT&T, Level 3 Communications, Corning, Americans for Tax Reform and the American Council of the Blind, has been warning people of the coming "exaflood" of video and other Web content that could clog its pipes.
….and in case you are wondering, here’s a bit more about Level 3 Communications, taken from their own website:
Level 3 counts among its customers:
19 of the world’s top 20 telecom companies
9 of the 10 largest telecom carriers in Europe
9 of the top 10 U.S. Internet Service Providers (ISPs)
9 of the top 10 U.S. cable companies
4 of the top 5 telecom companies in Asia
Top 5 U.S. Wireless Service Providers
….and surely you are aware of Americans for Tax Reform? Well maybe the name Grover Norquist will ring a bell (from Wikipedia):
Americans for Tax Reform (ATR) is ostensibly a group that pushes for lower taxes. It has close ties to the Republican Party and has frequently allied itself with the tobacco industry.
ATR is also a backer of the Media Freedom Project:
The Media Freedom Project is a project of the Americans for Tax Reform, a corporate funded non-profit group.
Announcing the formation of the group, the ATR stated that the projects is "dedicated to deregulation of the media." In the media statement announcing its launch ATR stated the project was created as a response to "liberal efforts to re-regulate the media, including attempts to reinstate the so-called "Fairness Doctrine," an antiquated Federal Communications Commission rule that would have the effect of pulling the plug on conservative talk show personalities such as Rush Limbaugh, Sean Hannity and G. Gordon Liddy.
AT&T’s membership in this group is a no-brainer, as is that of Corning, makers of glass, as in optic fiber cables, as in billions in new business.
OK…so now we have the actors in this scenario identified and the script is clear…..
Get an “indepdent study” done to create the justification for your real goal.
Get lots of government bucks to pay for it (everyone who believes this study was independent of IIA, please report immediately to your nearest psychiatric facility for several weeks of shock therapy.)
And we have the arguments all spelled out…..big crunch coming, something has to be done……Mr. Mehlman (previous posting as the U.S. Commerce Dept.) spells it out:
The responsibility for keeping up with this growing demand lies with backbone providers and national policy makers, added Mehlman, also executive director of the Technology CEO Council, a trade group, and a former assistant secretary of technology policy in the U.S. Department of Commerce.
"It takes a digital village," he said. "Certainly, infrastructure providers have plenty to do. You've seen billions in investment, and you're seeing ongoing billions more."
U.S. lawmakers can also help in several ways, he said. For example, the U.S. Congress could require that home contractors who receive government assistance for building affordable housing include broadband connections in their houses, he said. Congress could also provide tax credits to help broadband providers add more capacity, he said.
Consumers also pay high taxes for telecommunication services, averaging about 13 percent on some telecom services, similar to the tax rate on tobacco and alcohol, Mehlman said. One tax on telecom service has remained in place since the 1898 Spanish-American War, when few U.S. residents had telephones, he noted.
Let’s look at this pretty carefully and yup…there it is…buried at the end and well worth repeating:
Congress could also provide tax credits to help broadband providers add more capacity, he said.
Consumers also pay high taxes for telecommunication services, averaging about 13 percent on some telecom services, similar to the tax rate on tobacco and alcohol, Mehlman said. One tax on telecom service has remained in place since the 1898 Spanish-American War, when few U.S. residents had telephones, he noted.
Let’s put Bruce’s thoughts in terms everyone can understand….
1- The government should give the telecom industry more subsidies to invest in expanded broadband capacity and
2- While they are at it, they should also eliminate service taxes which help assure that essential telecom services are made available to everyone.
The Reason this is all a Sham:
OK….hopefully many of you have already spotted the missing elephant in this whole scenario. For those who have not, a quick real-life scenario from my own workplace:
I work for a small institution of higher education and like most businesses today, e-mail and the ability to move information back and forth within our organization and between our offices and outside entities, is vital to our operations.
Each morning, when I come into my office, I check my overnight e-mail. One of those messages is a listing of the e-mails sent to my personal address but blocked by our campus spam filter. (Oops, I’ve given away the secret.)
Yes…spam. I routinely receive over 100 spam messages each day, addressed just to me. Our spam filtering system is VERY good and captures over 99% of the junk addressed to campus mailboxes. On a broader perspective, the filter screens between 55,000 and 60,000 e-mail messages each day. Out of that total, it identifies about 3,500 to 4,000 as valid.
Yes….you read that correctly. About SIX percent of all the e-mail received by our campus is legitimate. Well over 90% of it is bogus……Nigerian money scams, fake watches, pirated software, and hundreds of offers to enlarge my sexual organ.
We can argue about the relative file sizes of spam messages versus those with a large video attachment, but by any measure, I think we could safely agree that well over 50% of the existing international net capacity today is being used to transmit junk mail.
And yet the entire “independent study” and all of the commentary by the net system providers apparently makes ZERO mention of this fact.
And while there have been occasional bleats and a few “showcase” prosecutions of major spam generators, there is no real concerted systemwide effort to attack this massive problem. It continues to get worse and worse. Why?
Well for the system providers, the last thing they are interested in is finding a way to make better use of existing capacity. They are clearly interested in more….more building, more bucks, more capacity.
Best way to get there? Shout warnings that we’ll be out of capacity in two years and then urge Congress to give them more money to help serve a market demand which their own studies claim is headed this way.
Isn’t a free-market business model one based on identifying developing need and responding to it? Their own “independent study” is telling them that a massive surge in demand is headed their way and that they are only investing about half of what will be needed to meet it. Shouldn’t that be all they need to step up those investments and take advantage of the business opportunity headed their way? Shouldn't those statistics be the ammunition they need to attract eager investors?
Why is industry asking government to pay for it through subsidies (lost government revenue) and then cutting taxes on the industry itself (more lost government revenue?) Oh wait….I forgot. That’s the model for financing the war in Iraq isn’t it?
Better yet, a “clogged” Internet, even if the reasons for the clog are clear and solvable, plays right into the hands of the service providers in terms of “net neutrality.” (Imagine how quickly spam could be controlled if industry and government really cared, and especially if it took just 10% of that $137 billion in unnecessary new net investment and applied it to the problem.)
As soon as the clog occurs (or even if it is just a threat), the providers will argue…..”This is the classic case of supply and demand. We don’t have enough capacity, so if you want access to the net, you will pay more……to the richest goes the spoils.”
And that access control, of course, enables the providers to selectively price their product in ways that can, in the wrong hands (read Grover Norquist) favor one political ideology and voice over another, and one economic class over another. Sort of like getting rid of that pesky “Fairness Doctrine.”
Welcome to the Brave New World…..
UPDATE: See my message post below for yet another wrinkle to this story.....If you've been wondering if Bruce and Ken are related.....they are!