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Obama on Broadband

Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
11/24/2008

Given all the problems he has to deal with, Barack Obama may not have the future of the U.S. broadband business at the top of his "to-do" list, but he did make several strong commitments in the run-up to the election that suggest change is coming to broadband America. Those changes could have major ramifications for the industry, both inside and outside the U.S.

Space precludes a full discussion of the Democrats' plans, but two commitments stand out.

First, Obama said that he "strongly supports" the principal of network neutrality – a commitment that could lead to legislation outlawing the use of deep packet inspection (DPI) and related technologies that discriminate among applications and the way bandwidth is consumed by them. If that happens, many telcos, cable MSOs, and others will have to think again about what services they supply and at what price. But the commitment raises many difficult issues. For example, will it apply to the increasingly important suppliers of wireless broadband services that use cellular network technologies such as EVDO and HSPA? And if it does, how would that affect the way they provide those broadband services?

Second, Obama said that the U.S. should "lead the world in broadband penetration and Internet access." The U.S. isn't actually doing that badly; it's true that it lies 15th out of 30 developed economies that are analyzed by the Organization for Economic Cooperation and Development (OECD) , but many of the countries ahead of it are small Scandinavian territories, and leading economic rivals like Japan and China (which is not analyzed by the OECD) are lagging behind the U.S. All the same, if it wants to be a leader, it has a lot of work to do, and a long way to go to achieve universal broadband access – currently, household penetration is around 60 percent.

What might Obama's commitment mean in practice? Could the U.S. commit public money to kick-start the construction of more fiber broadband networks, or to encourage the buildout of low-cost wireless broadband services – and if so, on what terms, and to whom? And given the strong implicit commitment to open networks and services, might the Federal Communications Commission (FCC) revisit its decision to give incumbents such as Verizon Communications Inc. (NYSE: VZ) a regulatory holiday on network unbundling when they build out fiber? What if Verizon responded to such a move by suspending its fiber build-out – where would the U.S. then look to meet its commitment to lead the world on next-gen broadband? Ditto the wireless service providers, which would play a big role in providing broadband to the 40 percent of households that don't yet have it – but might kick up rough if the Democrats impose net neutrality on them as well?

As in all major policy revisions, the losers often shout louder than the potential winners, and the implementation of Obama's pre-election commitments could be an uphill slog in practice. Pledges such as "universal broadband" tend to require tradeoffs among the many groups that have a stake in that pledge. It will be interesting to see where and how those tradeoffs are made.

— Graham Finnie, Chief Analyst, Heavy Reading

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chocodile
chocodile
12/5/2012 | 3:26:18 PM
re: Obama on Broadband
As with most of his campaign promises, I'm waiting to see if the nightmares will come true. Probably won't touch net neutrality for a year or more, but it will be interesting to see who he picks to replace Martin in the FCC.
giles0
giles0
12/5/2012 | 3:26:17 PM
re: Obama on Broadband
is that Vint Cerf?
OldPOTS
OldPOTS
12/5/2012 | 3:26:16 PM
re: Obama on Broadband
Buy more MCI stock?

OP
rahat.hussain
rahat.hussain
12/5/2012 | 3:26:16 PM
re: Obama on Broadband
@Giles: brilliant! :-)
brtechy
brtechy
12/5/2012 | 3:26:15 PM
re: Obama on Broadband
Most likely Mr. O is part of a long list of people who heard about the issue and has people on all sides reaching out to him to ask for support to their positions and give "unbiased" advice, but who does not truly understand what's at stake, let alone what is DPI or QoS.

Most of the people do not really understand what is Net Neutrality about, and even those who do also do not understand fully all of the implications (just ask a big NN proponent if he believes traffic in a highway should not be interrupted / slowed down to give priority for an ambulance carrying a patient whose life is in risk and this alone may start to change his view on the topic).

I hope he's at least true on the commitments about broadband development, and that is a world apart from NN - let's look at the issues that matter first.
paolo.franzoi
paolo.franzoi
12/5/2012 | 3:26:13 PM
re: Obama on Broadband

So, what happens when all residential broadband capex drops to 0?

There is no requirement to spend a dollar. Just remember that. So before we get all caught up on what we are going to force carriers to do, remember that they don't have to even deliver broadband to anybody.

Now, for SBCs order to get 100% broadband coverage in its territories to buy BLS - they claimed the availability of Sattelite access met the requirement. This was apparently considered satisfactory as there has been no coverage of any issues.

Now, the truly funny part is this "internet without having to go through some corporate media middleman" - what the heck does he think iTunes is? So as long as all sites now get no money for the services they provide and 100% of the money flows to all the actual content owners then we might have a policy. I am guessing Apple would have an issue with that.

I am not for blocking content, but I find this set of ideas pretty funny.

seven


rahat.hussain
rahat.hussain
12/5/2012 | 3:26:13 PM
re: Obama on Broadband
@brtechy: I agree he may not know DPI or QoS, but I don't think he needs to. Here's what he does know - a transcript of a podcast from Obama.

Podcast Transcript

Hello, this is Senator Barack Obama and today is Thursday, June 8th, 2006.

The topic today is net neutrality. The internet today is an open platform where the demand for websites and services dictates success. You've got barriers to entry that are low and equal for all comers. And it's because the internet is a neutral platform that I can put on this podcast and transmit it over the internet without having to go through some corporate media middleman. I can say what I want without censorship. I don't have to pay a special charge. But the big telephone and cable companies want to change the internet as we know it. They say they want to create high-speed lanes on the internet and strike exclusive contractual arrangements with internet content-providers for access to those high-speed lanes. Those of us who can't pony up the cash for these high-speed connections will be relegated to the slow lanes.

Allowing the Bells and cable companies to act as gatekeepers with control over internet access would make the internet like cable. A producer-driven market with barriers to entry for website creators and preferential treatment for specific sites based not on merit, the number of hits, but on relationships with the corporate gatekeeper. If there were four or more competitive providers of broadband service to every home, then cable and telephone companies would not be able to create a bidding war for access to the high-speed lanes. But here's the problem. More than 99 percent of households get their broadband services from either cable or a telephone company.

So here's my view. We can't have a situation in which the corporate duopoly dictates the future of the internet and that's why I'm supporting what is called net neutrality. In the House, the Energy and Commerce Committee and the Judiciary Committee reached different conclusions on network neutrality. Judiciary Committee members voted to protect net neutrality and commerce voted with the Bells and cable. That debate is going to hit the House floor this Friday. In the Senate, Senators Snowe and Dorgan are leading the fight for net neutrality and I've joined in that effort. Senator Inouye, the ranking Democrat of the Commerce Committee, has joined us in this effort as well and he's working with Senator Stevens to put strong network neutrality into any Senate bill that comes before us. There is widespread support among consumer groups, leading academics and the most innovative internet companies, including Google and Yahoo, in favor of net neutrality. And part of the reason for that is companies like Google and Yahoo might never have gotten started had they not been in a position to easily access the internet and do so on the same terms as the big corporate companies that were interested in making money on the internet.

I know if you are listening to this podcast that you are going to take an intense interest in this issue as well. Congress is going to need to hear your voice because the Bell and cable companies are going to be dedicating millions of dollars to defeating network neutrality. So I'll keep you updated on this important issue and I look forward to talking to you guys again next week. Bye-bye.
inlight
inlight
12/5/2012 | 3:26:12 PM
re: Obama on Broadband
bretchy wrote:
just ask a big NN proponent if he believes traffic in a highway should not be interrupted / slowed down to give priority for an ambulance carrying a patient whose life is in risk and this alone may start to change his view on the topic

---

The problem is not with allowing an ambulance carrying sick person in an emergency.
But the problem is if the ambulance is checked for who the sick person is, an decides to allow/bar that privelege.

inlight
brtechy
brtechy
12/5/2012 | 3:26:07 PM
re: Obama on Broadband
odo,

that shows he can read a script... not he really that he understands what NN is (and I agree with you, he does not need to understand DPI and QoS, but he DOES need to understand the underlying discussion).

As seven mentioned, it is a funny set of ideas indeed if you don't understand the whole picture.


_______________
odo wrote:

@brtechy: I agree he may not know DPI or QoS, but I don't think he needs to. Here's what he does know - a transcript of a podcast from Obama.
brtechy
brtechy
12/5/2012 | 3:26:07 PM
re: Obama on Broadband
Hi inlight,

I guess you reinforced the point, which is not who goes in the ambulance in this example, but that there is the need for SOME type of traffic control, and we cannot talk about the Internet being a complete open lane no matter what, or else your patient (no matter who it is) will die anyway.

If you want another analogy, think about the toll roads... there are several ways to get to a destination, but if you want to go the faster routes, you got to pay the toll, or be happy with sitting on a little bit more traffic on secondary, open access highways (obviously BOTH of the ambulances on your previous note would have to pay no toll, but you may still want to control the traffic to avoid ambulances from getting stuck).

In summary, Net Neutrality should not be about Net Anarchy, but about open access given some conditions: transparency, any legal content allowed (no unfair blocks), all subject to fair network management.

PS: Google loves Net Neutrality, but has a HUGE private network...

_________________________

bretchy wrote:
just ask a big NN proponent if he believes traffic in a highway should not be interrupted / slowed down to give priority for an ambulance carrying a patient whose life is in risk and this alone may start to change his view on the topic

---
and inlight wrote:

The problem is not with allowing an ambulance carrying sick person in an emergency.
But the problem is if the ambulance is checked for who the sick person is, an decides to allow/bar that privelege.
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