February 6th, 2006
Why should anyone believe the Bells?
Over the weekend I caught an e-mail from C. Marc Wagner, a regular correspondent of our own David Berlind. David was even kind enough to publish it as an item on his blog.
Wagner argued that it’s OK the U.S. is falling in terms of broadband access, because we’re so spread out and other countries are more concentrated. Of course, 80% of Americans live on 15% of the land area, and if it’s all about density why doesn’t New York City have rocking speeds?
The answer is monopoly. The Bell companies have had a monopoly on phone service for nearly 100 years, based on the promise everyone would get a phone. (After many decades nearly everyone did, but not always from the Bell System.)
Supposedly that monopoly was ended by the 1984 Bell break-up. Supposedly competition was mandated by the 1996 Telecommunications Act. But the Bells have spent the last decade putting themselves back together, and using government to extend their monopoly, from the phone to Internet access. (In some areas the monopoly is shared with a cable operator.)
Imagine if Western Union, 10 years after Alex Bell’s invention, had been able to buy him out and get monopoly status from the government.
The situation right now is that you probably have just two choices for "fast" Internet access, and by "fast" I mean, maybe 1.5 Mbps downloads. (This is no longer fast as the rest of the world defines fast. It’s Pentium service in a Pentium IV world.)
Based on a promise to deliver fiber to the home, the Bells now say that monopoly should be enhanced. No competition from municipal governments - that would be Socialist. No wholesaling as in England - that would be unfair.
Moreover, they want to turn the whole idea of the Internet on its head. In 19th century terms they want to turn telephony into telegraphy.
On the Internet bits are bits, but the Bells see bits as services. They want to charge you based on services (movies, songs, phone calls) plus they want to charge the companies whose servers provide these services. In other words they want to be paid twice.
And if they’re paid twice, they promise, fiber for everyone. Eventually.
The problem is, the Bells have been promising fiber for everyone for a decade and have failed to deliver. While fiber backhaul costs have been declining in line with Moore’s Law, and while data radios have been improving in line with Moore’s Law, the Bells have been doing, nothing - just banking their profits, buying each other out, lobbying the government.
Their promises, at this point, should be as worthless as Jeff Davis’s promise to fight on after Grant took Richmond.
Yet some people still believe these promises. Why? Why should anyone believe anything any Bell executive says? Exactly what has the Bell System done in the Internet Age to deserve such trust?
Anyone? Point me to a fulfilled promise, by any Bell company, over the last 10 years. That’s your homework for today.
Extra credit. Who’s pictured, and why?
Dana Blankenhorn has been a business journalist for 30 years, a tech freelancer since 1983. You can follow Dana on Twitter. See his full profile and disclosure of his industry affiliations.
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