isen.blog

Dana Blankenhorn explains eloquently that the best government "subsidy" to encourage universal connectivity to the Internet (which is another way of saying "universal Service" without the conceptual baggage) is for government to make sure that the benefits of Moore's Law flow to the end user.

I say

Show me a government program that puts twice as many teachers in the schools every eighteen months year after year. Show me a government program that halves the cost of medical care every eighteen months year after year. There are none. If Moore's Law would flow to end users, it would be the best government program possible, and it would cost approximately nothing.

I've tried to explain to my more traditionally liberal friends that government subsidies in the form of tax breaks or credits or contracts, even if they start out as the best intentioned, best aimed, and most cost-effective, will simply become more slop for the oinkers with their snouts already in the trough.

Blankenhorn explains why:

The problem is that networking capacity, both the cost of moving a bit over a long distance and the cost of delivering that bit at "the last mile" of the network, is falling in value even faster than the car in your driveway. When the radios of today are more than twice as capable of handling local traffic as those of two years ago, and the technology of fiber lines show similar improvements, you have blown a hole into any long-term financing scheme.

No one, not a private company, not a municipality, not the federal government, can justify building telecom capacity today on the basis of a 30-year note. Not when that capacity is going to be worthless, in real terms, just three years from now.

This echoes David P. Reed's must-read (and a fairly easy read, too) Accounting in the Age of Moore's Law.

Blankenhorn continues:

The real solution, as I've said, is to endorse full competition. Let the Bells die. Let the cable operators die. Demand that any company wishing to use some of their infrastructure be able to get it, at low, low wholesale prices . . . In the end the only worthwhile assets the Bells and cable operators will have are publicly-controlled -- telephone poles and electromagnetic spectrum
*snip*
Every policy prescription I see, across the political spectrum, is an excuse to subsidize either the government or incumbent duopolies. Conservatives' proposals actually violate their own ideological smell test, while liberal solutions all smack of corruption.

Yeah.

[By the by, I wonder when the supposedly libertarian Cato Institute will endorse this pro-competitive view. Adam Thierer, Cato's telecom wonk, seems to think that just because the telcos were here first, that a market exists. He conveniently ignores that the descendents of the Bell System got where they are today because the Bell System was an arm of Big Government. All government needs to do to bring the full benefits of communications technology to everybody is regulate anti-competitive behavior by preserving the right to attach to poles and conduits and use the unlimited, God-given spectrum to the full extent that technology makes possible.]