Ars Technica is carrying an article about Comcast’s FCC filing requesting a change in the ownership limits that restrict a single company from owning more than 30% of the market on a national basis.
Originally designed to prevent a national cable monopoly, this limit is significant to Comcast which is currently has over 28% of the nearly 100 million cable subscribers nationwide. Comcast is arguing that, given AT&T and Verizon’s recent entry into the market and a variety of online outlets for video content, this limit is antiquated.
It’s a tough call. As Ars noted,
So far, the FCC’s moves towards deregulation have arguably had a negative impact on consumers, especially when it comes to broadband.
Still, by and large, having multiple cable companies does little to create competition since they rarely compete in the same geographical area. In the end, having one or one hundred different cable providers on a nationwide basis gives most individual the exact same level of choice–one provider for cable television. In the end, the infrastructure costs create a natural monopoly, meaning that competition in voice, video, and Internet will be between different technologies (ie cable, telco, and wireless), not different implementations of the same technology.
Given that the FCC allowed the recent AT&T and BellSouth merger–and telcos DO compete against each other on a national basis for business-class services–it only seems fair to allow similar consolidation on the cable side. As noted above, it really doesn’t hurt the consumer to allow consolidation within a given technology. What the FCC really should be concerned about– and has paid little attention to–is consolidations among technologies. Recent expansions of AT&T into wireless Internet or AT&T/Cingular’s eventual cellular Internet rollout (on a mass-market basis–you know its coming) does far more to harm competition than national franchises in a single technology. A national broadband policy mindful of creating true competition would be prudent to make sure that various technologies ARE encouraged to create competition since there will never be significant competition otherwise.
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While I was doing some research for my last post, I ran across an interesting PDF summarizing growth and capacity of international underwater cables. Give it a read, it has some interesting numbers. A quick preview–trans-Atlantic traffic has grown as follows:
2003: 375 Gb/s
2004: 500 Gb/s
2005: 700 Gb/s
Another interesting statistic: Asia is enjoying the fastest growth in international Internet usage (75% growth in 2005, while Europe is last, lagging behind the North American 42% with 38%
It is especially interesting in light of recent discussion of a bandwidth crisis, albeit of limited application since it only deals with submarine International capacity. While “lit” capacity (ie fiber that is actively in use) is at 80-90% utilization, the unlit capacity goes up to an average of 10 Tb/s, depending on the links. Yes, that is 10 TERRA bits per second. In other words, as far as fiber goes, we are using around 5% of our current capacity using current technology. Given the idea that future technology growth is certain to bring exponential expansions in fiber capacity, it’s pretty safe to say that we are set for a long time to come.
All in all, this just further reinforces the idea that any bandwidth crunch is a monopolistically-imposed artifical market shortage.
(Note: all numbers are approximate, since I’m reading them from charts.)
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Is there an upcoming Internet bandwidth crunch? I’ve touched on this issue before and generally would argue–along with any telecom blogger worth his/her salt–that the impending bandwidth crisis getting mainstream press is telco-funded garbage.
A few rough statistics. Internet traffic grows at, more or less, a steady exponential rate, approximately 50% per year. In a free market, the increase in demand would be matched, eventually, by an increase in supply. In the telco world, well, the telcos just start angling for legislation to allow for them to restrict demand, rather than build out infrastructure. They can create a “bandwidth crunch” at will simply by refusing to keep up with demand; much as Intel–if they had a sufficient monopoly–could create a processing crunch simply by stopping R&D.
Imagine if IBM had maintained a monopoly on the PC and had only leased them out instead of selling them. Imagine if they decided that, given that paradigm, R&D into new hardware was just to risky to the bottom line and that they’d be better served by just maintaining their monopoly through legislation. Sounds unreasonable? Welcome to the world of telecom.
Our world, delivered? Our world progresses. Deliver that.
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Now, in addition to Congress and the FCC, the FTC is angling to jump into the Internet regulation fray. As Drew Clarke at GigaOM reports,
The FTC usually gets press for investigating gasoline, drug or tobacco companies. But every decade or so, the FTC also makes a bid for jurisdiction over the Internet.
It’s an odd move for the FTC, since it is the traditional realm of the FCC. Still, their angle on the matter is even more surprising, since it adds nothing to the hands-off FCC.
What is truly bizarre about this turf grab, however, is that the FTC apparently wants power so that it, too, can do nothing about net neutrality.
“I start by admitting my surprise at how quickly so many of our nation’s successful firms have jumped in” – i.e. eBay, Google and Microsoft – “to urge the government to regulate,” FTC Chairman Deborah Platt Majoras said when she announced her Internet Access Task Force in August.
..Majoras repeated the caution at February’s event: “Policymakers should be wary of regulation that are clothed in terms of protecting consumers but that in practice would hamper competition, while benefiting only certain vested interests.”
Yikes. Perhaps the real competition won’t be for the privilege of regulation through inaction, but for the dubious honor of sounding as inept and clueless as possible during the process. “certain vested interests” is not the usual turn of phrase for what I’d largely guess to be, well, almost everyone involved in the Internet except for the ILECS, cable companies, and their sponsored supporters.
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