[RTC List] Broadband op-ed in NYT

[Pat Bitton]

Mr Krugman clearly did not take into account when assessing the French
market development that France was way ahead of most countries back in the
early 80s with Minitel, essentially an online yellow-pages-style community
that delivered information over phone lines to TV screens. So it's hardly
surprising that France is still ahead of most countries in the area of
Internet TV. The French government has been in the business of delivering
connectivity to all sectors of society, regardless of ability to pay, for
more than 25 years. (But don't forget that French citizens pay for these
initiatives, along with healthcare and other quality-of-life benefits,
through higher personal taxation. Like everything else in life, it's a
tradeoff. Personally, I'd be happy to pay more taxes to improve many of
these areas, but I am probably in a minority ...

Pat Bitton
Partner, Euresto Partners Inc
Sales & Marketing for Technology Startups
Phone (707) 268 8968
Cell (408) 464 0829
Skype: pat.bitton
www.eurestopartners.com
 

-----Original Message-----
From: list-bounces at redwoodtech.org [mailto:list-bounces at redwoodtech.org] On
Behalf Of Sean McLaughlin
Sent: Monday, July 23, 2007 7:12 AM
To: RTC
Subject: [RTC List] Broadband op-ed in NYT


http://select.nytimes.com/2007/07/23/opinion/23krugman.html?pagewanted=print



July 23, 2007
Op-Ed Columnist
The French Connections
By PAUL KRUGMAN

There was a time when everyone thought that the Europeans and the Japanese
were better at business than we were. In the early 1990s airport bookstores
were full of volumes with samurai warriors on their covers, promising to
teach you the secrets of Japanese business success. 
Lester Thurow's 1992 book, "Head to Head: The Coming Economic Battle Among
Japan, Europe and America," which spent more than six months on the Times
best-seller list, predicted that Europe would win.

Then it all changed, and American despondency turned into triumphalism. 
Partly this was because the Clinton boom contrasted so sharply with Europe's
slow growth and Japan's decade-long slump. Above all, however, our new
confidence reflected the rise of the Internet. Jacques Chirac complained
that the Internet was an "Anglo-Saxon network," and he had a point - France,
like most of Europe except Scandinavia, lagged far behind the U.S. when it
came to getting online.

What most Americans probably don't know is that over the last few years the
situation has totally reversed. As the Internet has evolved - in particular,
as dial-up has given way to broadband connections using DSL, cable and other
high-speed links - it's the United States that has fallen behind.

The numbers are startling. As recently as 2001, the percentage of the
population with high-speed access in Japan and Germany was only half that in
the United States. In France it was less than a quarter. By the end of 2006,
however, all three countries had more broadband subscribers per 100 people
than we did.

Even more striking is the fact that our "high speed" connections are
painfully slow by other countries' standards. According to the Information
Technology and Innovation Foundation, French broadband connections are, on
average, more than three times as fast as ours. 
Japanese connections are a dozen times faster. Oh, and access is much
cheaper in both countries than it is here.

As a result, we're lagging in new applications of the Internet that depend
on high speed. France leads the world in the number of subscribers to
Internet TV; the United States isn't even in the top 10.

What happened to America's Internet lead? Bad policy. Specifically, the
United States made the same mistake in Internet policy that California made
in energy policy: it forgot - or was persuaded by special interests to
ignore - the reality that sometimes you can't have effective market
competition without effective regulation.

You see, the world may look flat once you're in cyberspace - but to get
there you need to go through a narrow passageway, down your phone line or
down your TV cable. And if the companies controlling these passageways can
behave like the robber barons of yore, levying whatever tolls they like on
those who pass by, commerce suffers.

America's Internet flourished in the dial-up era because federal regulators
didn't let that happen - they forced local phone companies to act as common
carriers, allowing competing service providers to use their lines. Clinton
administration officials, including Al Gore and Reed Hundt, the chairman of
the Federal Communications Commission, tried to ensure that this open
competition would continue - but the telecommunications giants sabotaged
their efforts, while The Wall Street Journal's editorial page ridiculed them
as people with the minds of French bureaucrats.

And when the Bush administration put Michael Powell in charge of the F.C.C.,
the digital robber barons were basically set free to do whatever they liked.
As a result, there's little competition in U.S. broadband - if you're lucky,
you have a choice between the services offered by the local cable monopoly
and the local phone monopoly. The price is high and the service is poor, but
there's nowhere else to go.

Meanwhile, as a recent article in Business Week explains, the real French
bureaucrats used judicious regulation to promote competition. As a result,
French consumers get to choose from a variety of service providers who offer
reasonably priced Internet access that's much faster than anything I can
get, and comes with free voice calls, TV and Wi-Fi.

It's too early to say how much harm the broadband lag will do to the U.S.
economy as a whole. But it's interesting to learn that health care isn't the
only area in which the French, who can take a pragmatic approach because
they aren't prisoners of free-market ideology, simply do things better.

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