Posts Tagged ‘Broadband’

A Challenge to the Next FCC Chairman: Make the US Last in Broadband Adoption

Thursday, February 7th, 2008

No matter what the outcome in November’s presidential election, about a year from now, the FCC will be anticipating the arrival of a new Chairman.  I present the following challenge to the next Chairman, whoever he/she may be: make the US last in the world rankings of per capita broadband adoption.  What?!  Stay with me for a sec.

The FCC defines “broadband” as any access technology providing at least 200kbps in one direction.  This standard was appauling when it was introduced nearly a decade ago;FN1 it is simply laughable now.   Shouldn’t this standard evolve at least a little bit over time?  Consider for a second Moore’s Law on computing per unit cost, which stipulates that preformance roughly doubles every two years.FN2    So, between January 1999 and January 2009, the price preformance of the electronics which enable a broadband connection should have increased by a factor of 32.  Thus, a resonable standard for broadband today would be 6.4 Mbps (200kbps X 2 X 2 X 2 X 2 X 2 = 6,400kbps).  Let’s say I missed my guess by a bit and an appropriate standard is 5 megs.  (Neither a particularly high threshold and about what I get at my home in a small suburb outside of Bonn, Germany.) In that same decade, the US rank in the world in terms of broadband adpotion has fallen from 3rd to 15th to 20th, by some counts.

Insight:  According to the FCC’s most recent data, in December 2006 there were 82.5 million broadband lines in the US.FN3  Using the 5 meg standard this number would drop to roughtly 11.5 million lines.FN4  The effect of reporting this as the number of broadband lines in the US would be to be to drop the US to a per capita broadband adoption rate of Slovakia or Mexico.  Only then would it be undeniable that the US is falling behind in the adoption of next generation networks.  And, only then would the FCC have the imperative necessary to take the steps which other nations are taking and “encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans,” per the FCC’s mandate. 

FN4: This is a bit of a fudge factor, but good enough for the back of the envelope.  Since the FCC only reports lines with speeds between 2.5 megs and 10 megs, I assumed that only 1/4 of the 34.7 million lines in this category were greater than 5 megs – I eyeballed this from the skew of distribution.

Irish International Advisory Forum on Broadband

Wednesday, February 6th, 2008

I am very please to announce that I have been appointed to an International Advisory Forum on Next Generation Broadband Networks.  Minister Eamon Ryan of the Department of Communications, Energy and Natural Resources established this Advisory Forum of senior telecoms experts and CEOs from around the world in order to advise him on the optimum role for Government in the development of Next Generation Broadband in the Republic of Ireland.

Insight:  As side for being a fantastic opportunity for me, I think this is right approach to policy formation, broadband or otherwise.  Policy makers should always pursue the “optimum role for Government.”

Classical conservative political though holds that “government is the problem,” and that a laissez faire approach is best.  Conversely, liberal politics hold that the profit motive is a sufficiently corrupting influence that in the absence of rules constraining the market place, the private sector will steal everything that is not nailed down. I am a lawyer, so I see these two statements as not mutually exclusive and both possible true.  I am also an MBA, so I can also see that there is some tradeoff between the two approaches.  And, if there is a tradeoff, it follows that there must me some optimization: one rule too many and government throws up barriers to entry to the market place; one government employee too few and the Invisible Hand can get into the Invisible Cookie Jar.  Thus, the policymaker should always be managing regulation to this efficiency frontier.