Tobold's Blog
Thursday, March 18, 2010
 
How broadband is like healthcare

A reader sent me a link to a NY Times article on the US National Broadband Plan, suggesting that this might be a "possible topic from someone with a world view". So I'm going to talk about that, and will explain how a national broadband plan is similar to healthcare in being a form of redistribution. My apologies if that'll sometimes sound a bit like Gevlon, only that I of course would be for redistribution, and he would be against.

Any government action is a form of redistribution of wealth. The government takes money in the form of taxes, and inevitably those who have money are taxed higher than those who don't have any. Then the government spends those taxes, usually with some sort of plan that is designed to benefit everybody. The national broadband plan is one such plan. 200 million Americans already have broadband, while the remaining 100 million don't have broadband. As up to now who has broadband was handled by private companies, everybody who you could sell broadband to profitably is already served. Now the government steps in to give people a *right* to broadband, so that by a mix of applying tax dollars and regulatory force the remaining 100 million will get broadband access too. As a lofty goal, at the end of that plan everybody in the US should have a 100 Mbit broadband connection at home. That is great news for those who live in rural areas, or are too poor to afford broadband now. But as the money to pay for all this has to come from somewhere, you can bet that those who currently have both money and broadband will end up paying taxes for that plan, and higher broadband fees as well.

One part of the news about this US National Broadband Plan is that the USA is only on place 18 of an international rank of broadband access by country. Why is that? Because the 17 nations ahead of the USA in that table are less capitalist than the USA. If you live in one of the rich countries where the government is more autocratic, or there is more of a welfare state, chances are that you'll also have better broadband. And better healthcare than the USA. Because universal healthcare, just like universal broadband access, is one of these things a strong government will push through, for the benefit of the less fortunate, against the wishes of their richer citizens.

Now some people like to paint this in black and white, with the capitalist USA in one corner, and the "socialist" Europe in the other. That is nonsense. There is a huge grey scale, on which the two aren't actually all that far apart. Paying taxes to finance schools, even if you don't have children, or to finance roads, even if you don't have a car, is redistribution too, and it happens on both sides. There is welfare and unemployment benefits on both sides of the Atlantic too, only in differing degrees. But in other areas there are stronger differences: Bismarck, who certainly wasn't a socialist, introduced universal health care in Germany in 1883; the USA is still discussing the idea in 2010. Some European countries, especially those in which the state had or still has a telecom monopoly, already have universal, affordable broadband, sometimes aided by geography, as connecting everybody is easier in small, densely populated countries.

It isn't all that easy to draw a line and say what government redistributive action is good, and what is bad. Those saying they would want to stop all of it probably haven't thought of how they would live without roads, schools, and hospitals. Me, personally, I think universal healthcare is a good idea. I even think welfare is a good idea if you don't overdo it. In general I approach those sort of questions with the thought of what happens if we don't give out healthcare or welfare. And seeing how much more likely Americans are to die early than Europeans, or seeing how much more of their population the USA has to put into prison, I prefer the European model, in spite of it obviously having flaws of its own. It turns out that social housing plus enough welfare to buy a TV and junk food is considerably cheaper and thus more effective than a prison cell. I'm not so sure that universal broadband access is a right every citizen should be entitled to, but that could change if more vital services are only reachable via the internet. In any case, as a matter of setting priorities, I think it would be better to stop people without healthcare from dying in emergency rooms first, before making sure they have something faster than dial-up to watch YouTube on. Call me a socialist, me and my friend Bismarck.
Comments:
Before we get on to universal broadband in America, I'd like to see universal phone service implemented. I used to work for a tech company on a project of getting internet access into rural schools. There are towns in America that have more houses than available phone lines, and the local phone company won't install more because it's not cost effective. (I don't blame the phone company. They are not a charity, they can't set out to lose money.)

One school we tried to help had to go with satellite for both up and down connection because the school only had two total phone lines and there simply weren't anymore available. In another area, the town was trying to get financing to build their own cell towers with a microwave relay back to an area with DS3 availability because most of the town couldn't get any kind of phone service.

Certain European nations have a distinct advantage over American in this regard. As Tobold said, it's easier to install wiring into those densely populated areas than into wide open space.


Bit of trivia: In school I was taught that the "first world" nation with the most modern phone system is Poland because their phone system was basically destroyed during World War II. In comparison, America is still using some of its original copper that predates the war.
 
A market system is a kind of swarm intelligence to manage very complicated things. For some things, like production of nails, it works perfectly. For others, like health care it almost doesn't work. For things like roads, the army or police it doesn't work at all.

Nowadays the problem is that many people think of 'free markets' as goal rather than a tool.

Market Failure
 
Left / right politics aside is no one else old enough to be amazed that access to the internet is now considered a merit good alongside food, water and fresh air? How the world has changed.
 
People reckon that television is a merit good too.

That's why people on welfare have huge 50 inch widescreen LCD TVs...
 
People reckon that television is a merit good too.

That's why people on welfare have huge 50 inch widescreen LCD TVs...


I correct myself:
Problem is not that many people think of 'free markets' as goal rather than a tool.

It's rather that most people don't think at all when it comes to left/right politics and use a gut feeling instead.
 
The fact is the internet is becoming a necessary utility if it hasn't already.

The majority of key services such as commerce, banking, telephone, and more are running over it these days.

Unfortunately our free market system doesn't reward companies while also protecting consumers for extending these services out to lower density cities and towns that aren't major cities and metro areas.

We're also suffering from pro-cable and telephone legislation thats allowed these companies to consolidate into a duopoly in most areas forcing consumers to choose between just 1 cable provider and 1 telephone provider often with the same high rates and limited services..

Then to make matters worse both providers often complain that 'bandwidth hogs' abuse there system thus they need to institute caps limiting your 'unlimited' bandwidth to metered bandwidth with charges for exceeding small limits.. all the while they push more data over the same network to provide telephone and increased video services. All in the name of higher profits and lowered investment into the infrastructure.

The situation has only been getting worse, and I for one am happy to see areas of our government step in and take notice as the business community has been starting to exploit their monopoly position and hasn't shown any inclination otherwise for the future.
 
Interestingly, the countries with the highest bb penetration are Japan, South Corea, and the scandinavian countries.
Their (in some cases, hidden) motivation is not that of universal service but rather one of progress. They think that it is efficient to invest in fiber to the home now, as in the coming 50 years, there is a very good chance of them being of good use, and the considerable investments necessary (2000-4000 USD/household) cannot easily be shouldered by the telco companies alone.

Money most probably well spent in the long term. But that long term is way longer than the thinking of most investors goes. Thats why a bb plan is a good idea.

A universal right to bb, on the other hand, will most probably not lead to efficient resource allocation and therefore is very likely to hinder the progress it is supposed to foster. Bb will go to the wrong people, slowing down the roll-out for those users where it would make sense. But it sounds so good to politicians :-)
 
@Scott you have just reminded me of something. The US plan calls for 100Mb/s download and 50Mb/s upload but I don't see any reference to a data allowance. That seems to be a major loophole. I would much rather have a 1MB/s line with a 100Gb download allowance than a 100Mb/s line with a 1Gb allowance.
 
A 100 MBit per second connection with a 1 Gbyte allowance could only run for 80 seconds at maximum throughput before hitting the cap.

No idea how caps are handled in other countries, but I used to have a 60 Gbyte monthly cap, which was lifted this month, so I'm now on unlimited access. Of course no plan is ever really "unlimited", because even if I could download at maximum speed all month, I would get only 1500 GByte of download at my current 6 MBit speed. Note that this is 6 Mbit *measured* speed, my ISP calls that "up to 20 Mbit" with a tiny footnote saying that actual speed depends on your distance from the telephone exchange.
 
I don't think it's that 100 million americans do not have access to broadband, it's that 100 million people do not have broadband.

I'd imagine that some that don't have it would like it but can't afford it, but most could do without it.

So the basic idea is to spend a ton of money giving broadband to people who don't want it and won't use it.

The government wins, the broadband companies win, the real estate developers and managers that get free broadband to their properties win. Everybody wins except taxpayers, which means that everybody important wins.
 
Depending on who wins the forthcoming election in the U.K. we may or may not be getting a tax to provide broadband for all:

http://news.bbc.co.uk/1/hi/8270772.stm

I'm all in favor. I like central spending and big government. I don't like making personal choices on and I am comfortable with being taxed at source for infrastructure spending. I'd rather have much lower take-home pay and have the government handle all the tedious background maintenance of civilized life for me, even if they aren't particularly efficient.
 
As SiderisAnon pointed out, we do have a disadvantage due to the wide spread of population, aided by out land area. While there is a lot of desert and mountain which can be ignored, there remain a lot of places which are expensive to run lines to and for which satellite connections were too expensive for the number of people serviced. As technology improves that is changing, but I still see practical reason why some people won't have broadband. And why it doesn't make much sense to bring it to them.
 
the REAL problem is that we have been paying extra taxes since the 90s to create this infrastructure, and the major players were given concessions (in the form of monopolies), and yet we still have nothing. Costs have gone up 90% in some cities like New York, which is impossible with competition, but happens easily when the company has a monopoly (just like employer provided health insurance)

And on top of that, the results of the new survey the government is conducting will be HIDDEN from the American people (another concession to the largest companies granted in that law). They (and congress) don't want us knowing how they are simply taking our money and laughing all the way to the bank.

It would be better to have spent no money at all, and not allow them to have monopolies, then you'd see choice and lower costs.

That's the main problem with redistribution of wealth, it's not the charity, it's the fact that money is taken by people who would put it to good use, and only half is usually put to the use they way it will be, the other half is lost to govenrment waste and concessions to companies that lobby and god knows what other black holes that money falls into.
 
@Tobold. That is my whole point. A 100MB/s bandwidth with a 1GB download allowance would be silly.

Nevertheless I could see it becoming a way for service providers to comply with the letter of the proposed US initiative but not the spirit: You are on welfare? No problem you can have a 100Mb/s line but you only get a 250Mb download allowance. Anything more has to be paid for.

By the way does your unlimited package have a "fair use" clause? They are an insidious way of enforcing an unspecified limit while pretending to be unlimited. Not that many people are likely to exceed 60Gb in a month anyway.
 
"Daergel said...
People reckon that television is a merit good too.

That's why people on welfare have huge 50 inch widescreen LCD TVs..."

I hope your being sarcastic, but if you aren't then as someone who ended up unemployed because of the housing collapse ruining construction here in Florida let me say Fuck You.

I recieved $873 a month from welfare for the few months it took me to find a new job. That was hardly enough to pay my rent let alone splurge and buy luxeries.

Statements like yours are ignorant, mal-informed, and just downright stupid.

Do people take advantage of welfare? Sure some do, but it's hardly as bad as what apparently you and many others think.
 
Belgium is known for its riduclously expensive and limited broadband Internet even if we have one of the highest adaptations. And that's exactly thanks to the fact that it used to be a government owned service.

Our government still holds 50% of Belgacoms shares and quite a few of Telenet. In other words, they don't benefit from bringing cheaper internet. None the less, we do have a "broadband internet for the masses" project started by our government. For 850 euros you get a PC and an internet abbo for a year. Not exactly something your average poor family can buy... It's probably used by quite a few people to just give their son a new PC and free internet when he goes to a home.

I'm curious as to what your ISP is and how much you pay? I pay €45 a month to telenet for a 30gb limit. And it's always frustrating to see a 20gb Age of Conan beta.
 
@Carra: Belgacom offers the new Internet Intense for €56 with unlimited access. For €43 you get the same "up to 20 Mbps download speed" with a 75 GByte monthly cap. Sounds better than what you have right now, unless your Telenet connection is much faster.
 
The phone line analogy is apt. The distances in America dwarf the countries we are being compared to drastically. If you really want a fair comparison, you have to compare us to a huge country like Russia or China (and to some extent Canada, although Canada is largely unpopulated away from the border.)

You have to lay thousands if not hundreds of thousands of miles of backbone fiber to reach the last 10% of Americans, where in a country like Japan you could lay 100 miles to reach that last 10% (and that isn't even taking into account last mile considerations.)
 
Speaking as a Canadian, a country whose politics tends to be pretty middle-ground between the US and European nations, I think that many people don't consider the negative consequences of putting forward a huge investment like this.

There are so many other more worthwhile "universal access" projects than broadband as some people have noted. Last I heard American public education was weak, jails were overflowing and healthcare is a mess.

I would think investing in any of the above would yield better dividends to a country in the long run than putting broadband into every home so people can watch faster p0rn.
 
I hope your being sarcastic, but if you aren't then as someone who ended up unemployed because of the housing collapse ruining construction here in Florida let me say Fuck You.

What many people who dislike welfare / social programs don't realize is that for every person who leeches off the system, there is another person who gets a crucial support in their life when they need it, and eventually improve their life so that they are a tax-contributor again.

I come from a single-parent home in a rather poor neighbourhood where, when I was young, we had to use social programs to get by. Without them I doubt I would have invested in education for myself, or have avoided drugs/crime, and since then I'm sure I've paid over a million dollars in cumulative income/sales taxes over the years since then and I'm only in my thirties.

I think the 1st world would be a much sadder place without at least some social support networks.
 
Oh Diamond, if it were only so easy to say "lets work on the important problems."

Congress has a history of ignoring the big issues while claiming "bi-partisan success" on other projects that only serve to male all the congressmen/women look good to their constituents.

President Obama has tried to focus on the bigger problems, but the republicans in congress would rather halt ANY progress on ANY bill that could put ANY democrat in a positive light.

Republicans convince Americans "that government isn't working." By due-process, people blame those with the most seats/power(democrats in this case) and then those in power get ousted.

Read more on the vicious circle of American politics here:

http://www.time.com/time/politics/article/0,8599,1964778,00.html

I am for expanded broadband, as social services like this are quality examples of countries making progress. I am all for progress.
 
And seeing how much more likely Americans are to die early than Europeans, or seeing how much more of their population the USA has to put into prison, I prefer the European model, in spite of it obviously having flaws of its own. It turns out that social housing plus enough welfare to buy a TV and junk food is considerably cheaper and thus more effective than a prison cell.

I just have a minor problem with these statements. For one if you calculate the EU vs the US we are not as far apart (78.7 vs 78.1) I know that is because of Eastern Europe but we have the South (just joking). We also have a higher migration number than Europe which is why we continue to outpace Europe's population. Mexico accounts for 24% of those immigrants, which isn't exactly know for great health care.

As for prison, it's not because of lack of social housing and food (which we do have for low income people) but our much longer and much tough criminal laws on non-violent offenses (theft and drugs).

Another thing in Europe's favor is that most countries have a very homogeneous society. Even more so if define population as white or non-white.

And as for the broadband aspect well again our differences make it harder for us, Europe is very densely populated where as once you get past the Mississippi River it becomes more spread out. That last 10% is mostly there and it will just be too expensive at this point to make it work.
 
Congratulation on a fine post.
Although we do not agree when speaking about games it seems we have the same political stance.

Health-care and Education are for me the corner stones of a civilized society.

No country where a part if it's citizens cannot access both can call itself civilized.

Ironically some of those who rail against Universal Health-care and Education (and I mean accessible, not free) have no problems with inflated military budgets where millions are spent in programs who are basically worthless. Star Wars anyone?
 
Another thing in Europe's favor is that most countries have a very homogeneous society. Even more so if define population as white or non-white

I'd disagree with this. Whenever I travel to the US, I'm amazed at how homogeneous parts of it are compared to Canada. I've gone into New England malls and not seen a single "non-white" person for hours. Nor do I hear any other language but English. It's only once you start visiting larger coastal cities that you get any multiculturalism at all. I have no idea of stats, but even if the absolute numbers of immigrants America takes in are high, perhaps as a percentage of its citizens it is lower than other countries.

Whereas Europe these days has a substantial amount of immigration (Africa, Middle East) that has transformed the "peoplescape" of countries like Sweden, Denmark, Spain etc.
 
Ah, we American often forget out past and our Great Deeds. There was a Rural Electrification Project that pushed wires out to underserved farms and small communities because it was felt that it was important to have that infrastructure.

Ditto the Interstate Highway system although I believe that was helped along by Detroit and people angry with the railroads (which were mostly private as I recall.)

Mandatory BB could likely be done here if you could sell it as a "Homeland Security" issue.
 
@chris too your last point: Isn't that interesting, it seems, if we can get the idiots on board, anything can be done.

"Expanding broadband will help all Americans communicate in a speed and scope never seen before, all the better to fight the terrorists! Quick, your neighbor just bought a huge bottle of shampoo from Costco! Report! Threat level elevated!"
 
Good post Tobold. The problem is our government here is so steeped in bribery nothing happens as planned.
 
I also think that the definition of BB needs to be updated for 2010; a mbs or 2 is not BB.

I really hope something happens.

There is also the problem that multinational copyright holders preferred the old days when people bought physical DVDs and CDs and are unsure the new world. Universal BB is not supported universally.

Clearly, America's BB is a case where freedom has so far failed us. (Cell phones are even worse with a large % being nonGSM.) Sad. The comfort is the free speech analogy; the waste and annoyance of allowing the stupid and vile to be said are the price for not allowing governments controlled by special interests to shape debates.

My hope is the third front: billions could be saved on energy with smart time of day usage encouraged by smart meters. And if your electrical meter can speak TCPIP why not build out the IP pipe to it...

Alas, when all is said and done, more is said than done.

P.S. re "inevitably those who have money are taxed higher than those who don't have any" - I think there are a lot of wealthy e.g. Brits with many assets outside the country who would disagree with that.
 
Ugggh... can we please let Europe stay in Europe? :(
 
The issue is current here too. Some left-wing politician announced a plan to make broadband i-net a "right" and it should be classed as a basic need. Pfft,ridiculous i say. Apparently at the end of 2009 93% of households here had i-net, and 79% broadband. To aim for 100% broadband would be silly expensive, since even in our superdensely populated mini country we have "remote" areas where it would be very costly to built the infrastructure needed. And take one guess who would pay the bill.

You would really think there are more pressing matters to attend to..
 
the only thing I want to argue about is your point about taxes. That "people with more money inevitably pay more than people with less." This isn't always true. For example, in the USA last year, the 400 richest Americans only paid an actual tax rate of around 16%. This is because their income is derived from stock revenue and other so-called "capital gains," and the tax code is specifically written to tax those earnings at a dramatically lower rate than say, someone earning $50,000 a year in an office or school. While in theory (and on the news waves) we're lead to believe that the rich are unduly burdened, they also have significant more tax advantages than an ordinary citizen.

Even regular people, on top of income tax, are also routinely billed social security and other payroll taxes. But guess what, if you earn in excess of something like $120,000 per year ... you don't pay those fees!
 
This comment has been removed by the author.
 
I'd disagree with this. Whenever I travel to the US, I'm amazed at how homogeneous parts of it are compared to Canada. I've gone into New England malls and not seen a single "non-white" person for hours. Nor do I hear any other language but English. It's only once you start visiting larger coastal cities that you get any multiculturalism at all. I have no idea of stats, but even if the absolute numbers of immigrants America takes in are high, perhaps as a percentage of its citizens it is lower than other countries.

Whereas Europe these days has a substantial amount of immigration (Africa, Middle East) that has transformed the "peoplescape" of countries like Sweden, Denmark, Spain etc.


There are areas that are fairly white but besides coastal areas, most of the south is heavily African-American minorities and now emerging Hispanic. Also Border states are excepted to have majority Hispanics in fifty years.

Also net migration for US is still higher than most countries in Europe except small nations like Luxembourg.

And what I was stating was not about multi-culturalism. I know in Europe there are many languages spoken, however most are European languages. Completely different cultures. I know Europe is getting more Arabs and North Africans lately but it's still much lower impact than Hispanic migration to US.

How can you list Denmark, it's white as white only less than 10% aren't even Danish.
 
@Tobold.

It's their package pricing that does it.

Telenet: €55:
-Digital TV
-Telephone
-Internet: 30gb/month, 12 mbit (which really is 12 mbit)

€75:
-Digital TV
-Telephone
-Internet: unlimited from july on, 25 mbit.

Since I really don't give a damn about the speed it's an extra cost of €20 a month just to get unlimited internet ><.

Mix Belgacom Internet + Telenet TV/Telephone:
-€56 + €21: €77.

So it comes down to paying an extra €20 a month which is rather excessive since the only thing you get more is extra limits and a bit more speed.

And djeez, Belgacoms website is one huge mess compared to Telenet. It even contains words like "Optionnal". Very professional.
 
Hagu: "I also think that the definition of BB needs to be updated for 2010; a mbs or 2 is not BB."

Wow - now there's a great example of merit good inflation. I think 2Mb is certainly enough to qualify as broadband, you can stream music and videos easily at that speed, and I doubt that watching YouTube for hours is what the legislators have in mind, rather than offering access to eCommerce, banking and reference sites.
 
It's interesting that you and most of the commenters took for granted that the justification of universal broadband, like universal healthcare, was rooted in a universal right. One need not show that such a right exists in order to establish the social utility of universal access to the internet. To say that someone has a universal right to X is to say that just by virtue of being who they are they have a claim to X that it would be wrong to deny.

I think that there ought to universal, government funded healthcare and broadband although I'm not confident that there exists a right to either (or that speaking in terms of rights is even correct). Academic philosophy has very little contact with public discourse, which is a shame for issues like this where philosophy can be a great boon in clarifying arguments.
 
Very, very well said, Tobold. I hear so many people say that socialism is evil and yet most of our closest allies are considered socialist and many of the most successful countries are socialist. Furthermore like you said, we aren't much different than them and what we consider "socialism", French people might not. I was astounded at first when Obama showed up to run as president that people were trying to demonize "socialism" like they did with "communism" but that was naive of me and it has actually worked pretty well. I hear people saying "socialism" in the same tone of voice as "child molester" and I wonder if these people are crazy or just easily mind-controlled. Maybe Karl Rove read "The Prince" more times than I realized.
 
I have to disagree with the the point that Broad Band is already available to all the markets where it is worth the investment. The best example is probably Greenlight.

That city got fed up with their internet, cable and phone provider(s) and did it themselves. The entire program was paid for initially by selling bonds to interested investors on Wall Street. The bonds are now being paid off by the profits from the services Greenlight provides to it's customers. None of it was paid for or facilitated by tax dollars. They installed fiber to the home and now you can get 200+ channels for TV, great bandwidth, and phone service for something like $120.

The Telco's response has been to litigate and lobby the state government and court system to have it all turned over to them. We'e been paying the Telco's for decades now to build better infrastructure and it hasn't happened. While I am all for making broad band available to everyone I don't know that legislating it the way we have been is going to work.

Universal health care is another thing I really like the idea of. Sadly I can't see how our system will get it right within the next fifty years.
 
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