The Level Playing Field Is Never On a Mountain Peak

The election of Donald Trump has lead to some pretty serious chicken little stuff, as people are worried, nay convinced, that all of the “good” from the Obama administration will be reversed in hours and the world will end in a puff of Trump’s hair. Trumps choices for certain appointments has been a trigger here, especially having two noted anti net neutrality types put in charge of cleaning out and reloading the FCC to Donald’s desired flavor of regulator.

This dovetails nicely with the general Republican desire to stop the FCC for doing what some have suggested is “making law” as opposed to “enforcing the law” or “applying the law”. This is in three areas, the previously mention Net Neutrality Title II status for ISPs. There is plenty of arm waving among those who support net neutrality often without really understanding what it really means and what it would accomplish – or not accomplish.

The simple truth is this: the wire phone business in the US was essentially stagnant for many, many years. Tough regulation, no competition, and one really big company running most of it meant little happened. So that big company was broken up into the “baby Bells”. The result, well… nothing really. Technology sort of took care of the question of long distance charges, and other than that we still have at best a touch tone phone attached to an ancient copper line to a very distance central office. Even given those parameters, few tried to complete. Cellular phones and IP telephony have pretty much done it in, except that now those same ancient copper lines are carrying internet data (slowly) back to distant central offices so that lower quality VoIP service can run and people can watch jerky motion cat videos on their computers.

The big game changer it was said would be fiber optic cable. Fiber to the house (FTTH) or at least fiber to the neughborhood was suppose to boost up internet speeds and bring on the future. Instead, most Americans are still enjoying 2 megabit connections and impossibly slow download times. The companies are slow to invest in fiber, which in theory should have opened up the market for new competitors. That knight in shining armor was called Google Fiber.

The story of Google Fiber is ongoing, but safe to say after rolling out in a few places with a big splash and taking over some otherwise dead muni systems, they have given up and tapped out of trying to cable the world. While they don’t break it out in a manner that can be proven, it’s pretty clear that Google Fiber has pretty much lost it’s ass big time, spending hundreds of millions while earning only millions in return, thus proving that there is more to the internet issue than meets the eye.

You have to remember that the US is a very large, mostly empty place. America still has suburban white picket fence dreams, monster commutes, and low population density in most of the country. The costs to cable that space is cost prohibitive. The incumbent companies have long figured this out and only upgrade where there is value in doing so, often backed with federal development money. Simply put, running fiber for 100 miles to serve 100 homes isn’t on anyone’s agenda.

Title II status and net neutrality just make this worse. It prescribes a plain yogurt version of the internet, where all companies provide a similar minimum service and that is that. It removes the desire to be better than anyone else, and encourages companies to politely not compete with each other in marketplaces. In many cases, wire line phone companies are moving AWAY from providing internet service and leaving it to the cable companies who can provide a slightly faster internet service without huge cost increases – but that are nearly tapped out on the technology level. Net Neutrality means “don’t build an over the top service, unless you will offer everyone else’s over the top service in exactly the same manner”. It removed the incentive to move forward, and the costs for new competitors coming into the marketplace is generally so high that even a moneybags company like Google can’t stomach it.

Quite simply, the level playing field is never built on the peak of a mountain. It’s generally built in nearly smooth valleys. Nobody fills in the space between the peaks, they plow them down and use those peaks instead to assure the level playing field is level. But without peaks, and lots of them, you have no chance of the valley ever getting filled in enough to merit raising that level playing field.

The FCC’s move to make 25 megabit connections as “high speed” is a joke. So few Americans enjoy that type of connection that it’s a meaningless metric. It’s half way up a peak somewhere. Once you level the playing field, it’s unlikely most would have more than 5Meg connections. Why would anyone want to? Cable companies don’t want to make it any easier for over the top services like Netflix to prosper and take their TV customers away. Dial line phone companies want to be in the TV market too, but having to provide equal access to third parties for free pretty much negates the desire to build anything out. They have figured out the point where they make the most money with the least risk, and that’s where they are going to stay under a net neutrality situation.

Without net neutrality, these companies will work to improve their internal networks so they can sell their over the top in house services to their customer base. If their product needs 10 meg a second to every home, you can be sure that they will set that as their goal and build a peak to get there. That peak will in turn become the valley where the level playing field will exist, and everyone will benefit in the long run. The other choice is to say no, and enjoy your dog slow connections and high costs that come with a lack of desire or need to innovate.

The FCC went way too far, it’s pretty clear. Wheeler is done, Trump won’t keep him or anyone else around for more than a few minutes, and there is a consensus emerging that perhaps the FCC as a whole needs to go or to have it’s mandate significantly limited in a manner where they can no longer screw up the internet or the digital future.