Posted by: Ann Treacy | January 24, 2013

Susan Crawford has a broadband solution. Is Minnesota ready for it?

I had the pleasure of seeing Susan Crawford speak in Dublin last summer. What I liked then is what I like now – she has a sense of urgency and she has a vision. She has an Op-Ed piece in the Ney York Times today – How to Get American Online.

She defines the problem…

At the heart of the problem lie a few powerful companies with enormous influence over policy making. Both the wireless and wired markets for high-speed Internet access have become heavily concentrated, and neither is subject to substantial competition nor oversight. Companies like Time Warner Cable routinely get their way when they seek to prevent local officials from encouraging competition. At the federal level, Verizon Wireless is keeping the F.C.C. in court arguing over the scope of its regulatory powers — a move that has undermined the agency’s authority.

She defines the symptom…

As a result, prices are too high and speeds too slow. A third of Americans opt not to buy high-speed Internet access at home, often because they can’t afford it

She presents a solution in three parts…

We need reasonably priced, globally competitive, ubiquitous communications infrastructure so that Americans can compete and innovate.

To get there, the federal government needs to pursue three goals. First, it must remove barriers to investment in local fiber networks. …

Second, the F.C.C. must make reasonably priced high-speed access available to everyone. …

Finally, the F.C.C. must foster more competition by changing the rules that keep the status quo in place.

This week I met with a business debating about what to do with their online presence. They had an almost adequate website but some people said they liked it. So in their minds the site was working; therefore they decided to put off any decisions about upgrades. But they are missing opportunities and as their competitors get (better) websites, their business is getting leapfrogged. The decision not to decide has hurt them. I feel like Minnesota is in the same boat. We’re looking at our almost adequate broadband system and we think it’s working so we’re putting off decisions to make it better.

In Minnesota this means we look at almost adequate stats (4 Mbps down/ 1Mpbs up) to measure our progress. (As I saw CenturyLink do at the MHTA meeting last week to say 96 percent of MN had access to broadband.) We look at average cost of broadband ($600/year) in Minnesota when we should be looking at worst case scenario pricing ($1000 a year for almost adequate access) for policy decisions. As Jack Geller has pointed out – we’re beyond focusing on getting average citizens online; we need to get to the hard core non-adopters.

We need to recognize that there’s a problem, as the Post Bulletin recently did, reporting that only 20 percent of Olmsted and Winona counties have access to broadband as defined by the state (10 Mbps down/5Mbps up). We need to recognize the urgency as Susan Crawford does – and then I think we can seriously look at some of the solutions.

 


Responses

  1. The tricky part about public infrastructure is that competition can actually hinder investment. Nobody in their right mind would come into a town and bury a second complete set of sewer and water pipes hoping they might be able to get a few customers from the “competition”. And if they did, neither company would be able to make enough money then to keep up with the upgrades over time. Another example might be building a toll highway right next to an existing one when the traffic estimates show it would never pay for itself.

    In highly populated areas where more than one provider can get a return on investment competition might help, but in rural areas, where broadband can cost thousands of dollars per customer, without an assurance of ROI, nobody wants to bother (probably why there is a good deal of Connect America Funds left on the table for rural areas–the roughly $700 per customer subsidy still wasn’t enough.)

    The Universal Service Fund was actually working pretty well, (and the “infrastructure bank” mentioned already exists for rural America in the form of the RUS loan program) but the programs were for voice only. Even still, many companies were finding ways to upgrade to fiber. The FCC is correct in updating the program to include broadband infrastructure and creating minimum standards for receiving funds, but it does seem like the big players have influenced things to tip in their favor–potentially allowing them to receive funds for 4/1 wireless broadband in rural areas, thereby making incumbents ineligible for robust fiber projects, etc.

    As has been pointed out, wireless has its place, but isn’t enough for all applications (businesses, government, healthcare, etc.). The competition that Ms. Crawford sees as the magic bullet could end up driving dedicated local companies out of business, leaving all rural communities with nothing more than inadequate wireless from distant large providers, or forever going back to the taxpayers for more funding for their own municipal projects. So we need to tread carefully here!

  2. Good points – that’s where I wish we had more ambitious national standards. As you point out the 4/1 is allowing some companies to skim the cream while those who have invested and/or would invest in faster connections lose out.

    Crawford has some points. The approach may or may not work for Minnesota but I like if it brings folks to the table to talk about what would work with the intention of making a plan that leads to state broadband goals – or beyond!

  3. I think that there is a lot of room for agreement here. I believe that it does not make any sense to have duplicative networks in the countryside, but that they should have at least one good network that is capable of delivering services that, at a minimum, meet the state broadband goal of 10 – 20 Mbps. If the existing telco in that area is not interested in making that investment, they should be required to offer up their infrastructure in a negotiated sale to either other providers or community-oriented organizations who would then be able to develop a plan to do the upgrade in a planned way over a couple years using some combination of market and public subsidy.

  4. Nail on the head, Bill, that’s exactly what’s needed for rural America; and to Ann’s comments, some of Crawford’s points are completely valid in urban areas. The solution will have to incorporate some of both, and I suppose the devil will be in the details as with everything.

    It was interesting to see the notes posted on the blog today from the PUC meeting yesterday. Looks to me like good constructive questioning and dialog occurring at the Legislature. And that’s a great starting point!

  5. I too thought the questions for the PUC were good. And it is hopeful! I was a little less hopeful after hearing some of the Legislative questions to Margaret Anderson Kelliher concerning the Task Force report (my notes will be posted tomorrow morning – here’s the link to the audio http://www.house.leg.state.mn.us/audio/ls88/labor012313.asx)


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