Monday, 30 March 2009

Pork barrel spending proposal of the day

Microsoft tells Obama to spend cash on broadband

My latest blogpost: Pork barrel spending proposal of the dayTweet this! Posted by Mark Wadsworth at 11:37

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8 comments:

AntiCitizenOne said...

1/ Aren't they already connected?
2/ What real benefit does super-fast broadband gain for a school?
3/ Hospitals should be connected together to share patient data, but the internet isn't the way to do that for obvious reasons.

30 March 2009 at 11:52
Steven_L said...

I tend to agree with them. Government borrow cheap money and contract out the work.

Government retain ownership of the fibre.

Securitise the data transfer rights - everyone is happy again.

30 March 2009 at 13:00
Mark Wadsworth said...

Steven L, you have fallen for The Big Lie that governments can borrow cheaply.

They can't (unless existing borrowing is very low).

30 March 2009 at 13:10
Tim Almond said...

One thing is that US broadband does have some quite serious problems (from reading forums on Slashdot). If you live in large, urban areas, you get lots of competition, in more rural areas, it's often a monopoly.

And because it's hard to enter the market in telecoms (digging up roads etc), it can be one of those things where a market doesn't easily occur (I was not a huge fan of the Thatcher privatisations because they only introduced faux competition).

So, maybe it's an acceptable thing that counts as public service, like roads and water. Create a network and allow ISPs to then rent from it (like we do with ADSL in the UK).

I was hoping that long-range Wireless would have kicked in by now, but it doesn't seem to be happening.

It's certainly got more "public interest" than bankrupt car companies.

30 March 2009 at 16:21
Mark Wadsworth said...

TA, fair do's, but either it makes commercial sense or it doesn't, and private companies are best placed to make that decision. It is pretty clear that it makes a lot of sense in densely populated areas* and no sense in rural areas.

And local councils can cream off a bit of the consumer/producer surplus by charging for the permission to dig up the pavemenets.

* And even then, NTL spent so much in the UK that it had to be bailed out via debt-for-equity swaps a couple of times.

30 March 2009 at 19:08
Steven_L said...

I'm sorry Mark, we're talking about the USA and I disagree with you that the US gvt can't borrow cheaply at the moment.

I read your post the first time and you made a very good point, but I still think that our government should look at intelligent infrastructure projects to stimulate employment and demand.

Breaking BT's monopoly on final delivery faster and putting faster infrastructure in place to open the door to future digital services strikes me as a good idea.

It would have been a better way to spend £12billion than the VAT cut for a start.

30 March 2009 at 21:51
Mark Wadsworth said...

SL, Karl Denninger would beg to differ on that first point.

I agree, monopolies are usually bad, but can't other ISPs share BT's cables? (I don't know, I'm asking; neither do I know what it's like in the US, I will take TA's word on that).

But if they were really looking for a quick way to stimulate employment and demand, they ought to scrap taxes on employment (i.e. Employer's NIC or whatever the US equivalent is).

30 March 2009 at 21:57
Steven_L said...

I'm no expert, but it strikes me as a tug of war between BT and the likes of Carphone Warehouse with OFCOM stuck in the middle.

I get the impression that BT and all the other ex-monopolies will do whatever it takes when it comes to 'manging market share decline' as my manager once put it when I used to tout gas and electric.

Telecoms is a pretty saturated market in my experience. Mobile firms rely on confusion marketing, low headline prices plus loads of sneaky confidence tricks to compete and create revenue streams.

They all want to get in on the broadband business now which means either buying wholesale bandwidth off BT (who lobby OFCOM heavily on price) or getting OFCOM to threaten BT with injunctions to stop them obstructing you from putting your own tech in their exchanges.

In hindsight I reckon BT should never have been floated with the last 2 miles of copper included in the price, it should have been owned by OFCOM and the bandwidth traded using the services of financial firms.

30 March 2009 at 22:53

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