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April 9, 2005

Proposal: Public Network Infrastructure

Filed under: Politics,Proposals — Michael Silver @ 10:45 pm

Want cheap Internet access? How about cheap cable TV? Cheap phone service?

The simple solution is to let the government build a fiber network to every home in the nation.

I can hear the Libertarians and right-wingers say, “Whoa!! The government own the network?!?! That is socialism!”, so let me first say the government owning something is not inherently evil. Judge what I am saying by it’s merits and don’t paint in broad brush strokes. Don’t be fooled by the claim, “private ownership reduces prices.” This is not true. A richly competitive market is what reduces prices. In fact, in a few cases, government ownership actually spurs competition. This proposal is a perfect example.

Another good example are the roadways. The goverment owns the roads and maintains them. In turn they reduce prices for all of us by promoting competition. Businesses are able to transport goods cheaply and people can drive to any grocery store they want.

Why not follow this example and do the same thing with a fiber network. This would open up a digital highway that would create compeition among digital providers.

Let me explain my proposal in more detail and it’s benefits will become more obvious.

The government should install fiber optic cable to every house in America, or at least 99% of houses. Both the running of cable and installation of the infrastructure will be very expensive, but this will be recouped over time.

Keep in mind, this fiber network is not a replacement for the Internet. The two networks are seperate. You could be connected to the fiber network and not the Intenet and visa versa.

There will become two providers of service on this new fiber optic network. Tier 1 and tier 2. Tier 1 providers would receive direct static IP connections to a house. This would be on a private network and the provider will have to pay fees for this connection. I will discuss these fees in more detail later.

Tier 2 providers would provide services through a tier one provider. There would be no network fees for such access. They wouldn’t have to register their services with the government.

In case I’ve lost you, let me provide some examples. The government connects your house to the fiber network. You shop around ISP’s and select one that provides Internet access over the fiber network. The ISP would be a tier one provider and a small part of your monthly fee would go to the government to pay for the infrastructure. The ISP would tier one since they would require an IP address to your house.

Let’s say you then discover Vonage and you want to switch your phone service. Since you already have Internet access via your ISP (and thus have an IP address), Vonage would be a tier 2 provider. Simple enough, eh?

Now let’s say you didn’t have Internet access, Vonage could offer tier 1 service to your house. The government would provide them with an IP address and you would have to spend an extra $1 (or so) a month to pay for the infrastructure. The choice would be yours.

What this does is break up the required bundling of services and grows competition exponentially by removing the Bell and Cable provider’s lock on high speed Internet access. This lock on the Internet by private companies is what is keeping prices artificially high and restricting your access to additional services.

You want IP phone service, well now you don’t even need internet access. Families with no money can now sign up for $10 phone service without needing an Internet connection. Wow!

By government / public ownership of the fiber network and a low barrier for entry for providers, a slew of services would spring up all with fierce competition. Earthlink and AOL would be ISPs, and perhaps even Time Warner and Comcast. Verizon, BellSouth, AT&T, Vonage, et al, would be competing for VoIP services. Jeez, I can only imagine the features they would be offering to set themselves apart.

Comcast and Time Warner and tons of start ups would offer set top boxes to provide TV shows via the fiber. Imagine how many hundreds of channels you would have access to. I can only imagine how PVR’s will develop to take advantage of all the programming options.

By having a public network, new tier one providers would be popping up on a daily basis. I can’t even think of all the possible services that would crop up. As the tier one providers expand, the access fees for the fiber network would drop. At least to a point. The fees can only be used to cover the expense of running the infrastructure. If a local community wants extra funds then they can tax the providers (like for 911 access, etc), but the access fee must remain pure. It is not a tax, it is an access fee. Also, the access fee needs to be around $1-5 per month to make this work. Perhaps higher for services that require high bandwidth, like digital high definition TV.

As you can see, this proposal is quite simple. There are many technical details that need to be flushed out, and wireless access is quickly changing the ISP paradigm, but wireless is far from offering what fiber can now. Wireless is promising, but there are too many loose ends.

What do you think?

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