How Best to “Upgrade America?”

I just read Blair Levin’s recent “Upgrading America” speech, whose subtitle is: “Achieving a Strategic Bandwidth Advantage and a Psychology of Bandwidth Abundance To Drive High-Performance Knowledge Exchange.”

As its longish subtitle (and reference to “combinatorial innovation”) suggests, Levin seems to appreciate the New Growth Theory perspective on broadband networks and policy, which I discussed here and here.

Given his extensive and fairly recent experience in high-level telecom policy roles, my assumption is that Levin  has a well-tuned sense of the realities of broadband policymaking in this country.  And his Gig.U initiative strikes me as an admirable and strategically-sound effort to catalyze movement toward the goals expressed in the title of his speech, without the need for major changes in current policy.

That being said, I think it’s useful to point out some things that struck me as missing from Levin’s speech.  Though my critiques may very well represent a “less realistic” view of policy possibilities, I think they’re worth raising, especially for those of us who believe there’s a more proactive and beneficial role for government in achieving the very worthy “bandwidth abundance” goals set forth in Levin’s speech.

What about Community Networks?

1.  On pg. 10 of his speech (see transcript here), Levin acknowledges cable’s extremely (or in the words of Wall Street analyst Craig Moffett, “almost comically”) high margins on broadband service.  He also notes that leading telcos have, to a large extent, ceded much of the wireline broadband market to cable, significantly weakening the competitive pressure on cable operators to upgrade their networks, particularly what has been described as cable’s “rail-thin upstream path.”

But, unless I missed something, Levin totally ignores incumbents’ aggressive efforts to kill off competition in the form of community fiber networks.  As discussed in reports and blog posts available at the Community Broadband Networks web site, the launch of a community fiber network (or even the threat of such launch) has had a demonstrated ability to trigger incumbent competitive responses in the form of network upgrades and aggressive price competition that saves consumers big dollars on their monthly bills.

While I’m inclined to agree with Levin that “we shouldn’t blame cable for succeeding or the Telcos for a rational capital allocation strategy,” I do think there’s something deeply anti-competitive about them spending tons of money (e.g., on state-level lobbying and campaign donations, endless lawsuits, misleading PR campaigns and push-polls, etc.) to prohibit or economically cripple virtually every community-owned network project that emerges from local needs that aren’t met by incumbents’ networks and investment strategies.

Abundant, but also affordable, open and neutral

2.  While I’d gladly second Levin’s call for bandwidth abundance, his speech seems to ignore other related and important issues, including the affordability, openness and neutrality of access to that bandwidth.  To the extent that most of the available bandwidth is put in service of a vertically-integrated, access monopolist-controlled “Cable TV Everywhere” model, the potential for achieving “combinatorial innovation” seems much less likely than if this bandwidth is made available to all end-users on a non-discriminatory and affordable basis (i.e., the “Internet” model)

3.  Unless I missed something, Levin doesn’t suggest any public policy changes, but rather accepts today’s regulatory and industry-structure status quo as a given (though he does at least imply this status quo is unfortunate in key respects).  Perhaps this reflects his “realistic” view of possibilities on that front.  But, given his level of expertise and experience, I’d liked to have heard more about his preferences for policy changes that could be helpful, even if he’s skeptical they can be implemented anytime soon.

4.   On pg. 11 of the speech transcript, Levin lays out a cost/benefit equation linking network costs to the benefits that accrue to six types of beneficiaries–network investors, content and application creators, equipment and device suppliers, the local community, the region, and the country.  He then notes that “the only benefits that matter to the investment decision are those that matter to the investor.”  This seems to assume that the investor is a private sector investor focused strictly on the internal rate of return generated by the network’s internalized costs and revenues.  This assumption ignores the possibility that some of the other network beneficiaries in his list might want to invest in the network (e.g., local communities, regions or even “the country,” which is the case with ARRA-funded and other RUS-funded broadband projects).

High speed Internet access as a public utility

Though I think Gig.U (and its recently announced sibling, AIR.U) is a brilliant and important initiative, and wish it great success, I also think that the notion of high-speed symmetrical Internet access as a public utility–upon which content & service competition and “combinatorial innovation” can freely thrive–is the most effective model for achieving the goals laid out with such clarity and passion in Levin’s speech.  Among the leading advocates of this model are law professor Susan Crawford and Christopher Mitchell, the founder and lead author of Community Broadband Networks.

As I’ve suggested in prior posts (and will elaborate on in future posts), I believe that a combination of Modern Monetary Theory and the New Growth Theory alluded to by Levin provides a strong policy rationale supporting a publicly-funded “community Internet utility” model.

But I also must concede that, at least in the near-term, the odds of MMT being enthusiastically embraced within Washington policy circles are about as low as the odds that Congress will pass a bill preempting state restrictions on muni-networks and/or mandating “structural separation” of local access networks.

But, even as I acknowledge today’s political realities, I’ll continue citing and linking to MMT economists and advocates, and harboring the hope that, as our citizens and their representatives confront our deep and unresolved economic problems, MMT will get a fair hearing in policy circles, including among those tasked with developing communication policies.

And I’ll also continue to cite and link to the works of Larry Lessig and others who make the compelling case that we need to “strike at the roots” of political corruption and, if necessary, hold a constitutional convention to “replant the roots” of our (small “d”) democratic republic.  Because it may end up that, unless this root-level work gets taken care of, the idea of a “fair hearing” in Washington may lose whatever little meaning it still has.

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This entry was posted in Communication Policy, Community Broadband, Economics, Modern Monetary Theory, New Growth Theory, Political Reform and tagged , , , , . Bookmark the permalink.

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