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Court Gets Right Result on Cable Case:

The decision in National Cable Telecommunications Assoc. v. Brand X Internet Services, was a victory for technological progress, and for property rights. For nearly a decade, some Internet predators (including, for a while, AOL) claimed that the government should give them the right to sell ISP services delivered on a broadband network which was built by someone else. In other words, if A builds a restaurant, then B claims that he has the right to sell food in A's restaurant, as long as B pays A a "reasonable" fee for access to the restaurant. In a broadband context, the government-abetted piracy was called "Open Access", and claimed as giving consumers more choice. But the more accurate term was Forced Access, since B would use government force in order to intrude B's business onto A's property. In the long run, Forced Access would have drastically reduced consumer choice, since Internet companies would be reluctant to innovate and take risks to build infrastructure, if the government might force an innovative company to share the infrastructure with another company that did not innovate technologically, but did exercise political clout.

The Court's decision today did not address the merits of Forced Access, but instead deferred to the judgement of the Federal Communications Commission in interpretting an ambiguous statute. (Whether broadband is an "information service" or a "telecommunications service.") The F.C.C. did act on a policy basis. Back in 1999, I wrote a lengthy Policy Study for the Heartland Institute warning that a policy of Forced Access could harm the rapid development of broadband connectivity. Fortunately, the covetous companies that demanded Forced Access enjoyed only mild success in their preferred forum (city councils) and their schemes were defeated when the Federal Communications Commission intervened.

Bob (mail) (www):
Though I cannot discuss the details of the US telecoms infrastructure and how much it will cost to upgrade it to modern standards, what I can say is one word that I would never use to drive it is competitive.

While the implementation details of Forced Access may not be fundamentally fair, the idea of giving cable and the Baby Bells exclusivity (read monopoly), is not the solution either.

Forced Access exists in several countries in Europe, particularly France, and has done so for a few years now. The competition is amazing and users can enjoy bandwidths of up to 25 Mbs that includes VOIP and television. All of this for less than 30 euros/month. How much did I pay when I was with BellSouth for 1.5Mbs (their 'high speed' offer) : $45. How many alternative choices did I have? 0. I realize there may be physical hurdles due to the size of the US, but I find it hard to buy the argument that granting a monopoly fuels investment.

Why do I mention telephone companies at all? Read the WSJ from today, the FCC wants to rewrite their regulations now so they can maintain a duopoly between cable and telephone operators. Consumer friendly. I think not.

Investment in new infrastructure and advanced services? What for? they have a monopoly.
6.29.2005 3:52pm