Soros gets it wrong: Telecom infrastructure is a monopoly, not Facebook and Google

Soros slams Facebook and Google as 'menace' to society, 'obstacles to innovation' - Business Insider: Facebook and Google effectively control over half of all internet advertising revenue. To maintain their dominance, they need to expand their networks and increase their share of users' attention. Currently, they do this by providing users with a convenient platform. The more time users spend on the platform, the more valuable they become to the companies. Content providers also contribute to the profitability of social-media companies because they cannot avoid using the platforms and they have to accept whatever terms they are offered.

The exceptional profitability of these companies is largely a function of their avoiding responsibility for — and avoiding paying for — the content on their platforms. They claim they are merely distributing information. But the fact that they are near-monopoly distributors makes them public utilities and should subject them to more stringent regulations aimed at preserving competition, innovation, and fair and open universal access.

Soros's position here is misguided. Facebook's and Google's online platforms are not natural monopolies like landline telecommunications infrastructure that delivers them to end users in their homes, businesses and institutions. Most people can choose between one and maybe two providers: a legacy telephone or cable company. These are truly public utilities since they are hardwired infrastructure unlike online social media platforms. They require fair and open universal access called for by Soros.

Facebook's and Google's online platforms are clearly hugely successful. But there's no guarantee they'll be around for decades like the telecom infrastructure that delivers them. Consumer preferences change and innovators create new services. It's a lot easier to do that with programming code and bits and bytes compared to relatively permanent telecom infrastructure as shown by the ongoing problem of service gaps that leave many premises unserved by landline infrastructure.

Both public and private sectors have role to play in U.S. telecom infrastructure modernization

State Senator hopes to spur rural broadband development in Alabama with incentive program - Yellowhammer News: Scofield notes that rural broadband is lacking because the return on investment isn’t there for providers who must build costly infrastructure to serve sparsely populated regions. While providers such as AT&T are investing in new technologies such as fixed wireless, which beam internet signals from cell towers to nearby homes, those speeds are only a slight step up from DSL.Some lawmakers are pressing for government to step into the fray, such as Sen. Tom Whatley (R-Auburn), who has introduced bills to allow the expansion of government-owned networks – such as the broadband system of Opelika Power Services located in his district. But Scofield takes a more limited government approach, noting that the private sector has both the expertise and the economies of scale to do the job more efficiently.

A more nuanced discussion is called for here. It's not an either private or public sector argument. Both the public and private sectors can play a role in the badly needed modernization and build out of America's telecommunications infrastructure. The public sector should own and fund its construction as it does roads and highways. To Scofield's point, the private sector has the expertise. It should build and maintain it just as private contractors do with roads and highways.

Show me the money: Congressman challenges argument that regulation greatest impediment to telecom infrastructure investment

Digital divide: Congress to push for better Internet access in rural areas: Yet the main obstacle to broadband expansion into rural areas is cost, said Pennsylvania Rep. Mike Doyle, the top Democrat on the House Communications and Technology Subcommittee. "It would require tens of billions of dollars to bring broadband to unserved and underserved parts of the country,” he said. “The private sector hasn’t done it because they know they wouldn’t make a profit on it.” Any rural broadband initiative without substantial new funding “would be nothing more than window dressing,” Doyle said.

The "window dressing" to which Doyle refers are assertions by Rep. Marsha Blackburn and other lawmakers that legislative solutions are needed to reduce regulatory burdens on ISPs to speed capital investment in "technology neutral" infrastructure (code for substandard mobile wireless and satellite versus fiber) to serve customer premises. It's refreshing to hear some economic honesty when it comes to tackling America's bad and worsening telecom infrastructure deficit.

Like Obama administration,Trump administration turns to symbolic window dressing rather than modernizing U.S. telecom infrastructure

Rural Internet to Be High Priority for Trump Administration | Successful Farming: Some steps can be taken in the near term to expand broadband networks, said Grace Koh of the National Economic Council. One would be clearer and easier rules for installing antennas on federal buildings and towers. “We will seek to use ‘dark fiber’ that the agencies have deployed in order to allow rural providers to interconnect and provide service to communities that have not had access to broadband before,” said Koh. “Dark fiber” is fiber optic cable that has been installed but is not in use. The administration will also coordinate funding, scattered among agencies, for broadband deployment and adoption. “We are hoping, at this point, to have a few immediate actions to start right away,” said Koh. “Certainly, we anticipate being able to make towers and other infrastructure from the Department of Interior available for collocation. This should cut down on tower construction costs and allow for providers to get their plant and equipment out much more quickly.”

The Trump administration like the Obama administration before it is engaged in symbolic window dressing rather than champion badly needed and aggressive efforts to modernize America's legacy metallic telecommunications infrastructure to fiber optic connections for all homes and businesses. These measures are symbolic incrementalism that will not make any meaningful progress toward that end because they don't deploy fiber over the "last mile" serving these premises.

An October 2017 report by the administration's Task Force on Agriculture and Rural Prosperity noted telecom infrastructure gaps are due the inability of investor owned providers earn a return on their capital investments in areas of the nation having lower population density. But while acknowledging that structural problem, it offers no alternatives, all but guaranteeing continued infrastructure deficits. It also advocates the use of wireless technologies rather than bringing connections to customer premises including satellite, fixed wireless, and cellular networks, calling it a cheaper "technology neutral" approach. However, these wireless technologies are limited by the laws of physics and have proven inadequate to accommodate the growing need for increased bandwidth.

"Mr. President, I think a bunch of broadband talk would be seen as a pretty weak response."

To Save the Internet We Must Own the Networks | By David Morris | Common Dreams

To Save the Internet We Must Own the Networks | By David Morris | Common Dreams:

The tools to build locally owned networks may well be there as the author of this article concludes. But adequate funding is another question. Constructing telecommunications infrastructure is very costly and labor intensive. It’s far easier to do in places where local municipal and cooperatively owned electric distribution and telecommunications networks already exist and have supporting infrastructure and funding mechanisms in place. Many of these entities got their start in the early in the 20th century with robust federal funding.

Nearly a century later, there is no meaningful federal funding to support the formation of new local entities to construct and operate advanced fiber telecommunications networks. State and local budgets are strained with obligations to repair and replace other aging infrastructure and honor pension obligations to their workers. They can’t be expected to provide billions to finance locally owned telecom networks.

Without government funding in the form of technical assistance grants and loans, expecting property owners and consumers to come up with the money is highly uncertain outside of highly affluent communities. As price takers rather than the price makers they would be the owners of local infrastructure, they are accustomed to purchasing “broadband” as a commodity monthly service and grudgingly tolerating exorbitant monthly costs and annual rate increases from incumbent telephone and cable companies. They’re unlikely to be motivated to put up the money to build an alternative -- albeit better -- network infrastructure than currently available to them unless they live in a neighborhood redlined by the incumbents.

Local ownership of telecom infrastructure is in concept a meritorious idea. But without a coordinated and well-funded federal program for it that recognizes that local infrastructure is essential to a vital interstate telecommunications network and not a local amenity like a park or playground, it remains only that.

FCC's repeal of Open Internet regulation sets stage for mega versions of 1990s era AOL, CompuServe walled gardens

The U.S. Federal Communications Commission has restored the regulatory framework that treats Internet protocol-based communications as an information service. The move reverses the commission’s 2015 Open Internet rulemaking classifying IP as a common carrier telecommunications utility under Title II of the Communications Act. So instead of an open Internet, the United States is turning back the clock to the closed, proprietary walled gardens that existed prior to the advent of the World Wide Web in the mid-1990s.

It’s even a greater back to the future policy move than appears at first glance. It sets the stage for media producers to consolidate with the companies that own the “pipes” – cable and telephone companies that serve more than three quarters of American homes, businesses and schools. After all, if those pipes are to be regulated as information services rather than telecommunications, companies that create information take on an integral role in this vertically integrated business model.

Consequently, the future could bring more combinations like Comcast’s acquisition of NBC or Verizon’s takeover of AOL and its pending deal for Yahoo! Under the new regulatory policy, it’s not inconceivable a big cable company or a telco could similarly make a play for Netflix.

Even Amazon, clearly in the information service business with its original offer of books and now its own production video content, could be a potential merger partner for one of the big pipe players. An Amazon-Verizon walled garden, for example, would provide this information content along with socks, towels and any other imaginable consumer commodity with both companies taking a nick of the revenues. Prime members might be eligible for a discounted monthly rate for Verizon connectivity.

The result would be a supersized version of the original big online information services: CompuServe and AOL. Both provided electronic mail along with content prior to the debut of the Netscape World Wide Web browser in the mid-1990s that swung open the garden gates to a vast digital universe. CompuServe even charged its subscribers by the minute to read “premium” content -- not unlike telephone long distance service. Such a billing scheme might well make a return under the FCC’s latest regulatory framework.

Last year Google abandoned its vision of building proprietary fiber to the home infrastructure to make its content more widely available. It could follow the adage, “If you can’t beat ‘em, join ‘em," and concede its effort to outshine legacy incumbent telcos and cablecos and their outdated metallic telephone and cable TV networks by merging with one of them to create a colossal proprietary information service.

Norman Macrae on telecommunications: Third of three great transport revolutions of past 200 years

Norman Macrae Surveys - help microeducate and microfranchise 3 billion jobs: "Telecommunications are now recognised as the third of the three great transport revolutions that have, in swift succession, transformed society in the past two hundred years. First, were the railways; second the automobile; and third, telecommunications-attached-to-the-computer, which was bound to be the most far-reaching because in telecommunications, once the infrastructure is installed, the cost of use does not depend greatly on distance."