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5.0 out of 5 stars US Broadband Inferiority, December 28, 2012
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This review is from: Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age (Hardcover)
As you drive from east to west across the US, there is a meridian in the breadbasket, somewhere in the eastern Dakotas, Nebraska, and Kansas, where gelatin salads start to appear in the supermarket deli cases. In the prairies it is not only acceptable but fashionable to serve molded, multicolored Jell-O with grapes, pineapple, and heaven knows what else arranged inside it. Once you get over the Continental Divide the fashion fades out. It's not a thing on either coast.

How did this get started? It's not an ethnic fashion. The folks who settled the Great Plains were Norwegians and Swedes and Germans, and gelatin is not an ethnic treat anywhere in Europe. Or anywhere else, as far as I know!

No, it's because there was a time when only rich folks could make Jello on their farms in the summer. People who were rich enough to have their farms electrified. Once Jell-O got imprinted as a luxury item, it remained fashionable even when everybody could have it.

You see, electricity itself was a luxury in the early 20th century, and gelatin salads were a proxy for being rich enough to have electric power delivered to your place. In her brilliantly troubling new book Captive Audience, she quotes this 1905 dismissal of government interference with the electricity market.

"The ownership and operation of municipal light plants stands upon a different basis from that of the ownership of water works, which it is so often compared. Water is a necessity to the health and life of every individual member of a community ... It must be supplied in order to preserve the public health, whether it can be done proitably or not, and must be furnished, not to a few individuals, but to every individual. Electric lights are different. Electricity is not in any sense a necessity, and under no conditions is it universally used by the people of a community. It is but a luxury enjoyed by a small proportion of the members of any municipality, and yet if the plant be owned and operated by the city, the burden of such ownership and operation must be borne by all the people through taxation."

This is exactly the argument being used today against government involvement in broadband. It is why children even in such hardly remote locales as western Massachusetts have to go to public libraries to do their homework. Comcast and Verizon just don't find it profitable to run cables and fibers into rural locales.

Those profits are maximized by managing scarcity. with the cooperation of a deregulatory-minded Congress, always hungry for campaign contributions from big corporations. As a result, what the FCC laughably calls its broadband plan of 2010 would have every American household getting 4 Mbps download, 1 Mbps upload by 2020 --- with 100 million households getting up to 100 Mbps download and 50 Mbps upload. The South Korean plan, by contrast, is for every household to get 1 Gbps (1000 Mbps) right now!

I recommend this book to everyone. It explains why my ophthalmologist can't send my retinal scans from his Boston to his Cambridge office electronically (that example explains why symmetric channels, with comparable upload and download speeds, are essential for economic development). Why the backup service Mozy will use postal mail to send you your backed up files on disk if your computer crashes -- the files were uploaded incrementally but to download them all at once would take a week or more.

The US is going to be a second-rate economy if we don't wake up to the simple fact that some regulation in communication technologies is needed to create universal service, and ensuring that service is one of the functions of government. Broadband Internet service is like electricity really turned out to be, and not as the privately owned electric utilities wanted the public to see it at the turn of the 20th century.
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Initial post: Jan 10, 2013 9:30:32 AM PST
Last edited by the author on Jan 10, 2013 9:31:24 AM PST
D. Kolkena says:
As someone who coincidentally works for Mozy, I wholeheartedly agree with you. Our product's success depends in large part on the ubiquity of dependable high speed broadband. The more we invest as a nation in internet infrastructure, the more that companies like the one I belong to will be able to bring better products to the market.
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