Which Kind of Internet Do “We the People” Want?

I believe we’re at a key crossroads in the evolution of the Internet, our economy and society as a whole. And, as I’ve discussed, I believe a combination of New Growth Theory and Modern Monetary Theory can help us choose the fork in the road that leads to increased human freedom and prosperity.

But I also believe that, in order to realize this brighter future, we must address an unfortunate but very real and fundamental clash of values and business models in our communication sector. So, before I go any further in discussing my policy proposals, I want to briefly review the nature and significance of this conflict.

On one side of the conflict are the relatively small number of dominant vertically-integrated local access providers, with cable operators like Comcast and Time Warner gaining increased dominance on the wireline side, while AT&T and Verizon do the same in wireless. On the other side of this values-conflict are the many individuals and organizations that rely increasingly on the Internet to communicate and exchange an ever-expanding range of goods, services and other forms of value. Continue reading

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NGT, MMT and Internet Policy: Overview

In this post I want to review some of the key points covered in several earlier posts. My goal is to set the stage for an Internet policy proposal based on a synthesis of New Growth Theory (NGT) and Modern Monetary Theory (MMT). Continue reading

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Do we want an unregulated monopolist with a conflict of interest to meter our web use?

In a piece in today’s New York Times, Brian Stelter focuses on “usage-based pricing” for broadband access, a growing trend that the story’s headline suggests will have “sweeping effects.”  Early on, Stelter sums up the issue this way:

The strategy, called usage-based billing, is advantageous for the companies that control the digital pipelines. But it may be detrimental for customers who are watching more and more video on the Web every month, as well as companies like Netflix that distribute it. Some fear that as customers become more aware of how much broadband they’re using each month, they’ll start to use less of it, and in that way, protect traditional forms of entertainment distribution and discourage new Internet services.

As Stelter notes, it’s not just news and entertainment that will experience these “sweeping effects.”  “The futures of entire industries — commerce, health care and transportation,” he points out, “are being built atop a broadband foundation.”

This means that, to a significant degree, the future of these industries (and their customers) will be subject to decisions made by “the companies that control the digital pipelines.”  Unfortunately, the digital pipeline business is seeing less and less competition these days, as DSL and wireless speeds fall ever-farther behind what cable can deliver.  This means that, in a growing number of local markets, cable operators are becoming de facto monopolists when it comes to delivering the kinds of speeds demanded by more and more businesses and households.

As Stelter notes, companies delivering web-based services that compete with cable TV for households’ entertainment budgets are increasingly aware of the problem, but lack good options for dealing with it. Continue reading

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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. Continue reading

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Social Costs of the “Looming Cable Monopoly”

At the end of an earlier post, I suggested that:

combining elements of New Growth Theory and Modern Monetary Theory [can] provide a rationale for increased federal investment in neutral, very-high-capacity broadband networks.

In this post I’ll continue that discussion, focusing on how New Growth Theory provides a framework for understanding the opportunity costs associated with what law professor and open-Internet advocate Susan Crawford has dubbed “the looming cable monopoly.”  In future posts I’ll consider how Modern Monetary Theory can be combined with New Growth Theory to largely eliminate these costs, and allow our nation’s citizens to reap the abundant economic, political and social benefits of ubiquitous, affordable, neutral, symmetrical high-capacity broadband networks.

I’ll start by revisiting a paper written by Crawford, which focused on New Growth Theory as applied to the Internet and communication policy. I discussed that paper at length in my earlier post.  A central point of Crawford’s paper was that:

The key organizing principle for communications law must be to support the emergence of diverse new ideas online because that is where economic growth for society as a whole will come from. This form of diversity support is not the same as the kind of quota-driven artificial “diversity” that has been used to force broadcast content regulation to reflect minority viewpoints. Rather, this kind of online diversity stems from allowing the end-to-end, content-neutral, layer-independent functions of the internet to flourish and allowing groups and human attention to pick and choose from among the bad ideas presented online, enabling good ideas to persist and replicate…

In a more recent paper, Crawford raised a related issue, which she described as the “looming cable monopoly.” Continue reading

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Archi’s Acres: A Single Solution to Multiple Problems

This morning I read a post by Dylan Ratigan announcing he was leaving MSNBC and a 15 year career in financial journalism (and an annual compensation said to be in the $1 mil. range) to more directly work with the “[m]illions of men and women…daring to create new, sustainable, tolerant, problem-solving cultures in almost every social, personal and financial system.”

The post made a reference to Archi’s Acres, a venture launched by a Marine vet and his wife in north county San Diego “to teach returning veterans how to use low-cost, hydroponic, organic farming techniques to create good jobs that produce twice as much food, at a higher quality, using 90 percent less soil and water.”

This got my attention (in part because I live in the San Diego area), so I visited the Archi’s Acres web site, where I watched several videos.  Here’s the first one, a 3 min. video introduction to the Archipleys and Archi’s Acres.

The story of Colin and Karen Archipley is important and inspiring for a number of reasons. Continue reading

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Replanting the Roots of our Republic

In an earlier post I briefly discussed efforts spearheaded by Larry Lessig to “strike at the roots” of political corruption.  As I noted then, Lessig is the author of “Republic, Lost: How Money Corrupts Congress–and a Plan to Stop It.” 

While Lessig’s overall goal is to free Congress from its corrupting dependence on money (see him interviewed here by Dylan Ratigan, who is spearheading the “Get Money Out” campaign), in this post I want to focus on an aspect of his political reform agenda that has emerged since the Supreme Court’s Citizens United decision:  his call for a constitutional convention.  Sticking with Lessig’s “roots” terminology, one might call this aspect of his strategy “replanting the roots of our republic.”

In a February 2010 article entitled “How to Get Our Democracy Back,” published in The Nation magazine, Lessig discussed the prospects for campaign finance reform in the wake of the Citizens United decision.

Referring to the changes proposed in the Fair Elections Now Act, Lessig had this to say about its prospects for achieving the necessary reform:

Before the Supreme Court’s decision in Citizens United v. FEC, I thought these changes alone would be enough at least to get reform started. But the clear signal of the Roberts Court is that any reform designed to muck about with whatever wealth wants is constitutionally suspect.  And while it would take an enormous leap to rewrite constitutional law to make the Fair Elections Now Act unconstitutional, Citizens United demonstrates that the Court is in a jumping mood. And more ominously, the market for influence that that decision will produce may well overwhelm any positive effect that Fair Elections produces.

While Lessig expressed continued support for efforts to pass the Fair Elections Now Act, the Citizens United decision apparently had convinced him that “we also need to begin the process to change the Constitution to assure that reform can survive the Roberts Court.” Continue reading

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Rethinking “Productivity”

This post was prompted in part by a recent New York Times opinion piece by Tim Jackson, professor of sustainable development at the University of Surry, and author of “Prosperity Without Growth: Economics for a Finite Planet.”  The provocative title of Jackson’s piece was “Let’s Be Less Productive.”

I was directed to Jackson’s op-ed piece by a blog post by Bill Mitchell, an Australian economics professor and a leading MMT theorist (and soon to be co-author of an MMT-oriented economics textbook).

While Mitchell seemed to support most if not all of Jackson’s goals and those of other “sustainable” New Economy advocates, he made a strong argument that these can be best (or perhaps only) achieved when macroeconomic policies reflect the kind of job- and demand-supporting perspective embodied in MMT.   I discussed this aspect of Mitchell’s argument in an earlier post entitled “MMT & the New Economy Movement: A Macro-Micro Marriage?”

Reading Jackson’s column and Mitchell’s blog post got me thinking about the meaning of the word “productivity,” and how it relates to the core arguments made in one my favorite books, Natural Capitalism.

Before considering this connection, let’s briefly review Jackson’s basic argument:

By easing up on the gas pedal of efficiency and creating jobs in what are traditionally seen as “low productivity” sectors, we have within our grasp the means to maintain or increase employment, even when the economy stagnates. Continue reading

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Key Points From MMT Economics Textbook Draft

Today Bill Mitchell posted some draft material from the MMT-oriented textbook he’s co-authoring with Randall Wray, another leading MMT thinker.  I thought I’d post a few brief excerpts from it, since they nicely summarize several core elements of MMT.  The first point relates to achieving full employment.  The second (and related) point is focused on how best to control inflation.

[A] nation will have maximum fiscal space:

1) If it operates with a sovereign currency; that is, a currency that is issued by the sovereign government and that is not pegged to foreign currencies; and

2) If it avoids incurring debt in foreign currencies, and avoids guaranteeing the foreign currency debt of domestic entities (firms, households, or state, province, or city debts).

Under these conditions, the national government can always afford to purchase anything that is available for sale in its own currency. This means that if there are unemployed resources, the government can always mobilise them – putting them to productive use – through the use of fiscal policy. Such a government is not revenue-constrained, which means it does not face the financing constraints that a private household or firm faces in framing their expenditure decision.

To put it as simply as possible – this means that if there are unemployed workers who are willing to work, a sovereign government can afford to hire them to perform useful work in the public interest. From a macroeconomic efficiency argument, a primary aim of public policy is to fully utilise available resources…

But what about controlling inflation you might ask: Continue reading

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Social Security: It’s About REAL Productive Capacity

I visited the MMT-oriented New Economic Perspectives web site today and found another of the animated videos produced by students in Eric Tymoigne’s modern money course at Lewis & Clark College (I’d posted a link to an earlier video here).

The video focused on Social Security, which it discussed from an MMT-oriented perspective.  While the whole video is worth watching, I found the last 5 minutes, which begins at the 8:04 mark, particularly worthwhile.  It starts with this initial Q&A exchange:

Q:  “If we don’t need to worry about [the financial health of] Social Security, what do we need to worry about?

A:  The future productive capacity.

While the video’s focus was Social Security and the need to address the needs of an aging population, the more general and very important point raised by the final 5 minutes is that, once our economic thinking is free of unfounded federal deficit fears, the real issues we need to focus on relate to how we can increase the REAL productive capacity of our economy to deliver REAL value and satisfy the REAL needs of our citizens.  

In future posts I’ll be discussing how Internet-related policies informed by both MMT and New Growth Theory can help address these REAL economic and social issues.

The (negative) flip side of the video’s message is that, if we and our political representatives get caught up in unnecessary “federal deficit” fears and adopt policy initiatives that reflect them (e.g., cutting federal spending during a recession to reduce the deficit), we’re very likely to aggravate the REAL problems we face regarding the ability of our REAL productive capacities to address our REAL needs, both today and in the future.

Unfortunately this seems to be the direction in which many government officials (virtually all Republicans and a lot of Democrats) are leaning.

Here’s the video (again, the section most relevant to this issue starts at 8:04):

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