May 30, 2012

Broadband Could Be Cheaper

Matt Yglesias says if American broadband sucks, we should blame the customers:
But in this particular case, we're not really talking about innovation at all. What's galling—to those of us who are galled by it—about America's broadband infrastructure is that we don't need more innovation. The relevant technology has been invented. What we need are more holes in the ground so that we can fill them with fiber optic cables. This is an expensive proposition, and the basic problem here is that when Verizon dipped its toes into making the investment it turned out that customers didn't want to pay for it. People who write about tech policy on the internet for a living place an unusually high subject value on high-speed internet access, so the resulting situation is frustrating for us. But the problem is really with the customers rather than the companies. There simply aren't enough people who want to pay a premium price for premium service.
An iPhone, which I don't have.
Now, I suspect his views might be a bit more nuanced than that, given this column arguing for breakup of the broadband trusts, so this is mostly a convenient excuse to talk about something that pissed me off, but I think this is partially mistaken.

Yglesias is surely correct that we don't need more technological innovation to drastically increase the average American's internet speed, but we could stand for a whopping dose of business innovation, in the form of good old-fashioned competition. America's broadband trusts are simply too large and sclerotic to chase down the business that's waiting for them out in the hinterlands.

Here's an example: the other day the internet went down at work. I thought that perhaps I could just "tether" my internet-capable phone to my computer, which is how I got internet back in South Africa. (Back in those days, 2 GB for a month was a ridiculous extravagance, which I happily bought.) The best way to do it there was with Linux, which has all the relevant connectivity information built into the OS, for nearly any country in the world. You just bought some data for your SIM card, plugged in your phone, picked your carrier (either MTN or Vodacom, usually), and the rest was done for you. Once you have the data access, really all you need is to teach the computer how to talk to the phone.

So, since I have a Linux/Windows dual-boot setup on my new laptop, I tried doing that here. I set up the system, and got a screen from Verizon saying if I want to tether my phone, I have to pay $20 a month for it. This isn't a case of forgetting to turn something on--all I wanted was to use the data I have already paid for, just through my computer instead of my phone. There isn't some mystical portal needed here either, the relevant protocols are available for free. This is a case of Verizon deliberately crippling that particular functionality in order to extract money from their customers.

To me, this is overwhelming evidence that America's telecom trusts are roughly half about providing a service and half about extracting money from their consumer base. Is it any surprise they can't be bothered to extend broadband to somewhat dubious locations? That's hard, gritty work. Much easier to try and loot your subscribers through bullshit fees and the like.

UPDATE: I had forgotten about this piece of evidence from earlier this month:
Unless you're paying $26 a month for unlimited phone calls, unlimited text, free international calls, and 3 gigs of data, per month, you are being royally ripped off. Because that's what they pay in France for far more service on their iPhones, and other phones, than we pay in the states for three times as much.


  1. You neglect to mention that France has a higher population density. 289 people per square miles versus 84 people per square mile. Covering area with towers is more expensive than updating capacity for areas already covered.

  2. Well yeah, but that's an average covering enormous variation. Sure it might be more expensive to cover the giant empty Montana-Wyoming-Dakotas area, but California is about as dense as France, and the DC-Boston corridor is a lot more so.

    Also, unlike things like land lines, mobile technology has the advantage of long-distance reach with little investment. Covering a dense place means putting up lots of overlapping capacity in a small place, while a single tower can service a huge area if there aren't many people in it.

    Bottom line, the broadband trusts are increasingly lazy and monopolistic, and there's big room for improvement.