Why Japan Is Eating America's Lunch On Broadband
I often say, to the point where regular readers of my home blog are probably banging their heads against the keyboard -- right now -- that the U.S. doesn't have a lot of complicated problems. We know how to fix most of them and people who keep saying, "well, that's complicated" are either stupid (unlikely), are benefiting from the status quo or are imagining the migraine of trying to fight entrenched interests.
Broadband access is exactly the same. The U.S. is getting its lunch eaten. As SaveTheInternet points out, they get access that is often 30x faster than the U.S. As a result they are experiencing innovation -- and enjoying applications that Americans simply don't have access to. As this Washington Post story points out:
The speed advantage allows the Japanese to watch broadcast-quality, full-screen television over the Internet, an experience that mocks the grainy, wallet-size images Americans endure.
Ultra-high-speed applications are being rolled out for low-cost, high-definition teleconferencing, for telemedicine -- which allows urban doctors to diagnose diseases from a distance -- and for advanced telecommuting to help Japan meet its goal of doubling the number of people who work from home by 2010.
Oh, and all that speed -- costs less too.
Now, 10 years ago Japan had slower internet than the U.S. So they looked to the U.S. to see how to do it -- and they saw that the U.S. had open access laws (where in the old days, companies could buy access to the lines at wholesale rates -- which is why there was an ISP on every corner in the 90s) and decided they were key.
So they opened up broadband access -- mandated that phone and cable lines had to be available to whoever wanted access. As SaveTheInternet points out:
If this quaint idea of "competition" seems familiar, that's because America invented "open access" policies in the first place. And open access worked for decades to bring lower prices and more choices in long-distance phone service and dial-up Internet access.
The Japanese first adopted open access because they were worried about falling behind us. But under pressure from our own phone and cable monopolists, the Bush administration abandoned open access -- and the fundamental protections for Net Neutrality along with it.
Now they're standing idly by as America drops further and further behind the rest of the world in every measure of broadband progress.
Now here's the thing. What we're talking about is the Republican administration reducing competition. In a competitive market this wouldn't have happened. When you're dealing with a natural monopoly (and phone and cable lines are natural monopolies because driving more than one each to each home doesn't make sense) you have to legislate the market in such a way as to make sure competition exists. The free market can't do its thing if there isn't a market -- and in most of the U.S. there isn't a market. You have at best two possible suppliers. Often one. And in many areas -- if you want "high" speed -- none.
The modern "conservative" fallacy is that free markets means lack of government regulation. That isn't even close to what it means -- what it means is a market with many actors, relatively transparent information, and no one actor or group with pricing power, whether through collusion or monopoly.
The laws that made the U.S. resistant to this sort of bullshit have either been taken away (open access) or have been weakened by the courts (for example the recent ruling that prices all being the same wasn't prima facie evidence of price fixing, which it has been for the last, oh, over 100 years.)
When you don't have competition, with few exceptions, you don't get nearly as much progress or better products. And so the U.S. has worse broadband. It has worse wireless. It has worse (and deliberately crippled) phones. It's falling behind in the very industries it invented. All because a few gatekeeper corporations don't want to have to compete and because the Bush administration and conservative justices believe in concentration of wealth rather than progress and competition.
The U.S. will keep falling behind as long as this remains the case. Americans like to think that they are the most technically advanced nation in the world, but except in military affairs, and perhaps biotech, that's generally not the case. The best and most advanced cars aren't made in the U.S. The U.S.'s trains are a joke compared to ultra-fast trains in Japan, China and Europe. The U.S.'s consumer electronics are not as good with very few exceptions. And the U.S. is falling behind on all types of telecommunications that don't involve spying on someone.
If the U.S. doesn't make the next technological revolution, foreigners don't need to hang onto U.S. dollars to be ready to buy up the future. And since the U.S. needs foreigners to subsidize American overconsumption and the overvalued dollar, that's a bad place to be. If the future isn't in America, then buying America suddenly doesn't seem like such a good deal...
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Actually the American peoplehave been taxed for Broadband they never got. Taxed are in place for the phone companies to build the infustructure for broadband in everyhome but the phone companies have used it for bonuses. Then sold the company and told the government we don't have the money the previous owners took it.
If we weren't stars at deluding ourselves we would have never gone to Iraq.
End of third Kondrtieff wave
Great Worldwide Depression
World War II
End of second wave
Panic of 1893, Cross of Gold money panic
Sherman silver purchase act passed.
Four Western Railroads go bankrupt
Union Pacific Railroad bankrupt.
Spanish American War
Boxer Rebellion China
Boer War England
Long wave [kondratieff] perspective.
This is the end of the fourth wave since Kondrafieff's nanalysis.
End of first wave.
British East India Company collapse
Anglo Chinese Opium wars
Irish potato famine
1837 black panic famine in USA
Mexican war
Millerites predict world will end
Bahi'a religion founded in middle east
I dunno-maybe America can save itself. Long shot. But just maybe the entire country wakes up in a cold sweat one fine night. lol If I had some ham and some cheese and some bread. Oh well no free lunches.
ya man we're fat and lazy and prosperous. While much of the world is struggling to eat. Some kinda justice here. Gonna be a reckoning. The Great leveling. Don't think for a second we will be spared. The Barbarians are at the gates. Rome is in dire peril. Look toward the New World. It's being born. A brand new spankin clean Brave New World.
great article- Face it American free interprise only means stiffling competition these days. Corruption of the IDEAL has become the norm. The hungry dogs gunna eat your lunch while you protect your position. Do the big boys in /american business give a shit-NO-because they get enormous salaries an bailouts anyway. Why sweat it dude. We got it made. - Who said "After me the Deluge"- Louie Catorce
"The Bush administration abandoned open access." Does this administration ever get it right? A rhetorical question- the answer has to be a resounding 'no'! Conservatives have shown they do not really like open, competitive markets; they like to protect concentrations of wealth and power. Free markets lead to next generation products and services. Concentrations of power leads to children of the wealthy going to the same Ivy League schools and joining the same fraternities as dad did.
Conservative justices more and more resemble mullahs who abandon woman rights, civil rights, and the rights of the lone individual to face down corporate power. Conservative justices, like Justice Alito, resoundingly side with corporate power over individual rights and protections. They abandon precedent at a pace that could hardly be called conservative. And they have an image of a 'pull yourself up by your bootstraps America' that exists only in their own minds.
yes, it is time to open up competition. real competition. We should not allow at&t to own just about the entire US cellular and land line infrasturcture. We should demand that cable companies not be allowed local monopolies.
We are supposed to be leading the world in technological innovation. That would be simply impossible with the hurting, underpowered, vastly overpriced internet infrastructure we have in the US.
We need to be investing in THIS country, and not so much in chaging things in the middle east. We need to be out of Iraq. We need to cut off the welfare to Israel, whose own actions in the occupied territories inspires much of the terror they (and now us as well) experience.
What would the 30 billion dollars we are giving Isreal buy in badly needed new internet infrastructure? That investment would lead to greater security for the US instead of going to support actions that Israel regularly engages in that INFLAME terror and blowback towards us, their financial and diplomatic backer.
Faster internet and less Terror? Sounds good to me.
True story: I was in Italy last year and as it was the last day of my trip I was completely out of Euros. A woman on the street was begging and came up to me, so I gave her U.S. currency. She looked at it for a moment, then handed it back to me and walked away.
So what are the ramifications of falling behind? An example is the Bose Wave Radio. It arrived on the market just as Lush Limbaugh and his proteges were seizing control of AM, and when, in Philadelphia, where I live, ... and which is the home of the Philadelphia Orchestra and The Curtis Institute of Music, ... we lost our full-time Classical Station.
~
I won't pay hundreds for a radio to listen to nothing. And I won't get high def radio for the privilege of listening to even more of the same.
Ian, this is a terribly important issue. Thank you for bringing it up. We need to focus the Congress on fixing this mess, as soon as we get the F out of the war in Iraq!
It is possible to use this post as an excuse to bash the US; so what?
After all, as long as we live in the US we're stuck with its problems.
Further, US technical backwardness outside the weapons sector will eventually have a military impact too.
I'd like to suggest that the issue is not as abstract as markets vs. non-market approaches; it is more that both markets and government are structured to support a narrow oligarchy. This oligarchy benefits from maximizing the return on invested capital, not rapid replacement of fixed capital when new technologies become available. Countries which take capitalism a little less seriously, and infrastructure development more seriously, will therefore continue to eat our lunch until we change our ideas.
It is worth noting in practice that it is not so much an issue of market vs. non-market approaches, as dealing with the devil in the details. What barriers to entry are there? Can apparent competitors collude? Is the service a right, or a privilege? Markets can be good or disastrous, as can bureaucracies.
excellently said
http://www
"This oligarchy benefits from maximizing the return on invested capital, not rapid replacement of fixed capital when new technologies come along"
Thank you Zenobius Kondrateiff, you just reinvented the Kwave cycle.
Free markets, are you kidding me? A wise economist once said: "When all economists agree that government should intervene in the market, you can rest assured that the government won't and when all economists agree that government should not intervene, you can rest assured that it will." Universal healthcare rights? Nooo! Intellectual property rights? Yessss! As if ANYONE ANYWHERE EVER 'invented' knowledge on his own. We only learn, not invent, new things because of what we already knew thanks to others. Who are we to claim that knowledge our property? You might as well start selling air, and that is where we're headed for.
Intellectual property rights protect those who have stolen the ideas of many. It destroys creativity and expunges the rights of cultures globally. Who would have thought a hundred years ago that Indian rice selected by farmers over milleniums would be owned by an American multinational selling it back to them as a new variety. Insane?
"I have seen farther than other men because I bought the shoulders of giants" ...Bill Gates
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