Over the past few weeks I’ve made contact with several outstanding individuals, but let me tell you about the last guy, Codename Gambler. Gambler because he looks like Kenny Rodgers at the top of his game.
Among other things, Gambler knows streaming media. I was unable to disambiguate HLS from H.264 and don’t know most codecs from each other, but I could generally parse the stream of info he burst to me the other day. I asked him whether or not he could articulate a technical reason for going against Net Neutrality. It was mildly surprising to hear him say what I’ve said on my less charitable days about the extent to which the likes of Comcast are justifying ‘technology’ price increases just for turning up dials they’ve already built. IE your bandwidth is throttled back to 3. I could turn the knob up to 5 in just a second, but defeating Net Neutrality allows me to charge you to turn it up to 5. (BTW it goes up to 10, I’m just pretending that it doesn’t). In other words, the infrastructure is already there and paid for.
If you cannot find an engineer yourself who can tell you this, then chances are that you are listening to the meta-politics and not seeing clearly. What I’m about to explain to you has very little to do with who the FCC chairman is or whom he works for, but more about how something you understand fairly well actually works. Hear me out and then think like a businessman, oh conservative friend of mine.
A long time ago when I drove a (new Turbo) VW Beetle, I found myself driving from LA to Georgia to work in Alpharetta at Cingular Wireless. This was right about the time that Deutsche Telekom was first putting a footprint into North America as T-Mobile. So I asked the obvious question. How the hell do they just put up a network and start doing business in the US? The answer? Cell tower clearinghouse. Huh? What? Since there is a standard for cellphone traffic, (GSM or CDMA or some such) all the electrical engineers with enough brains can build cell towers using those technical standards. And nobody owns all of the electrical engineers in America, consequently a lot of contractors made a pile of money during that great build-out as small businesses. And so it turns out that Cingular owned some cell towers, Verizon owns some, Sprint owns some, AT&T owns some. Two years before I arrived in Georgia, Cingular Wireless was called Bell South Mobility. Now Cingular is gone and there’s another company called Metro PCS. Nextel used to exist back then too. But let’s just pretend we’re still talking about 15 years ago before ‘the science was in’ and the US cellphone market was still up for grabs. If you had a cellphone and you drive away from a Cingular tower, chances are an AT&T or Verizon tower will pick up your signal. In other words, they share cell network infrastructure and have balances of payments settled at a clearinghouse.
Stop and think about that for a minute. Right this very minute, with every mobile device in America, these goliath phone companies are sharing infrastructure and using simple accounting to pay each other for carrying the other’s traffic. What’s more, they’ve monetized the whole business out of your mind and you don’t have to care. My nickel bet said you had no idea about this arrangement before you read this.
AT&T knows when your cellphone is talking to a Verizon tower and vice-versa, etc, etc. But none of those carriers own all of the electrical engineers building the towers. Sure they’ll market the hell out of whatever they’re calling their special network, but these days it’s all going to 4G LTE. That’s a standard just like DVDs. AT&T doesn’t own 4G LTE, it’s a technical standard. They market 4G LTE. Obviously it makes sense to have cheaper capital and build more cell towers vis a vis market share of the clearinghouse balance of payments, but it’s in everybody’s interest to keep all of the towers running. The bottom line is there’s no monopoly of cell tower networks. There’s one American standard for cellphone towers. Speaking of which, do you keep track of whose network you are calling in order to save money? If you are with AT&T, do you try not to call people with Sprint phones? Of course not, that would be ridiculous. Carriers *could* charge you more, and they used to, but it’s stupid now. My point is that infrastructure can be shared and clearinghouses can be kept, and the prospects for charging extra for internet cross-traffic are not a good long range business model. That model has gone the way of charging extra for long-distance or discounting for ‘Friends and Family’ calling circles. That’s so 2008. Speaking of 2008, whatever happened to Alltel? Oh. Swallowed up by AT&T. I bet it took no time for AT&T to route traffic over what Alltel used to call their network. Hmm.
Enter municipal broadband. I’ve got Verizon FIOS. Every time I go to Fry’s and the Direct TV guys are there trying to sell me Dish Network, their faces fall when I tell them I’ve got FIOS. They know that fiber rules when it comes to delivering Internet traffic to the home. But guess what, a lot of that fiber was built out by Level Three Communications, ex railroad guys who built lines in the railroad right of way. Remember the days of ‘dark fiber’? Remember how in 2000 people scratched their heads about delivering to the legendary ‘last mile’? Well all that has been done and paid for. And similar to cell towers, the internet network technology is understood by many electrical engineers. In fact TCP/IP technology has been around since the 70s. There’s no monopoly of understanding. Yet the monopoly for the consumer exists. My neighborhood, for better or worse, is a FIOS neighborhood. I used to live in a (horrors) Adelphia neighborhood, and before that a Time Warner Cable neighborhood. If I wanted fiber, I have to hope that I live in a Verizon neighborhood because right now they are ahead of the game, and right now no content providers share infrastructure. Again, however, Verizon doesn’t have a monopoly on the knowledge for delivering high broadband fiber, they just got their capital build-out plan started early.
Gambler tells me that there are smart people in Los Angeles city government who are proposing regulations that will remove that content monopoly by relicensing the physical monopoly. In other words, let the fiber guys build the right kind of fiber (that dials all the way up to 10) to every house in Los Angeles and then share access to it through a clearinghouse. If I want Comcast, it goes over the fiber. If I want Verizon, it goes over the same fiber. If I want Roku, it goes over the same fiber. Why? Because Google can play too, and why shouldn’t they? Now clearly, Verizon FIOS has got the jump in my town, but Google just happens to be building out fiber in Georgia, and that’s good news.
So now you can clearly see how, based on a business model that works perfectly well for cellphone traffic based on a technical standard understood by many engineers, how net neutrality can work on the same model. We want a regime in which cities get rid of captive monopolies by forcing carriers to all talk to the same fiber grid, the Municipal Grid, in the same way they do for cellphone traffic.
Now I’m going to add one more wrinkle because I don’t want you to think that this is the only business model that works this way. I just unlocked my iPhone 4s. It’s three years old and so AT&T says I can. So I did. That way when I go to Australia on business, I can buy a sim card at the airport and suddenly my phone works in Sydney, without AT&T. From whom do I buy my sim card? Well, they’re called MVNOs. These are companies who ride entirely on existing networks like AT&T’s but own none of the network infrastructure. So they can charge less money and give the same coverage because they’re smaller and focused on one simple thing – cellphone service. So on top of the fact that cellphone towers are shared among the big carriers and balances of payments made, these smaller companies ride on the same networks. Brilliant. Happening right now, today.
So whatever complaints opponents of net neutrality might gin up, they can’t say there is no business model for it, or that it’s anti-business. All American cellphone traffic uses shared network infrastructure today, and they make piles of moolah. It can and it should be the same way with a shared internet grid, using new players to build out new shared infrastructure based on open technical standards. It can still be advantageous to have a balance of payments surplus for those who build out first, but not to create captive subscribers with no choice. It ought to be for the sake of unlocking content for everyone. Let us unlock our TVs and computers and choose our own service providers and content whether or not they built that shared infrastructure. It’s in all of our best interests to see that goes forward.