Spectrum of Greed

Managing Dark Fiber - an economic stimulus opportunity.

Does anyone remember the term ‘Dark Fiber‘?  No, it isn’t an action movie starring Christian Slater and Heath Ledger.  It was a term coined in the telecom industry describing the results of unchecked capitalism during the initial heady gold rush to the internet in 1999 & 2000.  Several telecom vendors went out and each built what they considered to be the one best fiber network in the country, connecting cities all over the country and providing the potential for exponentially more bandwidth for the rapidly expanding internet economy.  But when the bubble burst in 2000, in the vernacular of the industry, many of those fiber lines didn’t get ‘lit up’, because with several vendors all connecting the same places, they overbuilt.  To make it worse, because technology’s nature is to get better, faster and cheaper over time, before all the fiber was even buried, technology had been created to make each strand of fiber 100 times as productive as it had been just a few short years earlier.  The result?  Dark Fiber, or fiber that was never lit, because it was never needed.  Much of this unused capacity still exists today and is resold and marketed to private industry and telecoms, but vastly under utilized.

Today I read about a rival economy to ours, Korea, that has set an aggressive goal for their countries internet connectivity - 1Gig available to customers by 2012, according to the Korea Communications Commission.  Don’t hold your breath waiting for our FCC to respond to the challenge.  What is even more sobering is that Korean citizens can get 100Mbit service now, nearly twice as fast as the fastest bandwidth available in the US (recently released - Charter - see article).

What’s the point of these nifty tidbits of broadband trivia?  I have a proposal for President Obama’s administration and how to expand the economic stimulus package and make the US competitive with the best in the world in internet speed, create jobs, and provide opportunities for many new internet entrepreneurs on top of the other benefits.  Our government needs to realize that the nuclear race of our parents day is the broadband race of today.  We wage economic war today, and because we have no leadership at the tiller, our economic war machine sucks.

There are just a few major objectives we have to do really well.  Here they are:

1 - We need to create an innovation preservation commission or whatever Larry Lessig wants to call it, (just as long as the FCC goes away!) and end the capitalist control of our internet infrastructure.  Just as it takes a visionary leader like JFK to set a goal to put a man on the moon by the end of the decade, we must have central control over our internet connectivity in order to drive it to aggressive new heights.  Capitalism is all about wringing maximum profitability out of things, maximizing processes and providing a desirable customer product that provides maximum profit to the corporation.  This is a good thing - most of the time.  But capitalism is not the right tool for all things.  Today there is no central control of our infrastructure without collusion if capitalism is the primary driver.  Each company is driven by their own business plan, leaving those customers that don’t fit the profitability model out in the cold.  Control of market share is key, so locking of devices and restrictions on features are techniques used to preserve profit margins.  And after 10 years of wireless data, we will see the sorry 13% adoption rate of all mobile users with data plans that we have today because if it were more affordable, it would cannibalize the landline business that these wireless companies are also wringing profit out of.

Don’t get me wrong, I don’t think the government should actually be EXECUTING this plan, I think they just need to hire contractors to do it efficiently, and develop contracts that reward the vendors with innovations that increase speed, expand coverage, and reduce cost to end users.  One other example related back to the dark fiber thing - if you scroll to the bottom of the wikipedia link I left above, you will see the definition of Butter’s law of Photonics.  Translated, this says that the cost of transmitting data over fiber is cut in half every 9 months.  Now if we had a commission whose focus was to deliver fast internet to American citizens as quickly and cheaply as possible, don’t you think that from 2000 until now that dark fiber could have provided some real speed to most residents in the US?

2 - Separation of infrastructure and content needs to be clearly defined.  Some call this Net Neutrality, and that is what we want to achieve, but that term fogs up the real issue.  As with other competitive market places, you have to put a few basic rules in place, or the competitors start playing by ‘jungle rules’.  Here in America, we want to be able to respect ‘rational’ intellectual property and provide a competitive open market that allows the best to survive.  Open markets provide price competition to lower costs to consumers while improving quality.  Part of the innovation commission’s job must be to make sure that any vendor that provides infrastructure to the American people is not in the business of providing any kind of content that travels over a network.  This would be a clear conflict of interest, and needs to be recognized as such.  Conversely, those that are in the content industries cannot provide infrastructure services for the same reason.

Of course, the devil is in the details, as it is with everything, so it will take lots of time to figure out the best way to manage many of these issues.  But first, most of you are saying, “how in the heck do we transition from privately owned to citizen owned, with all the spectrum and infrastructure sold or leased to the providers?

Here is where the real silver lining of the stimulus package can come into play.  Here is a radical thought - let’s purchase the spectrum and infrastructure back from those companies that currently manage it?  We don’t have to buy it all, of course.  We can start on the wireless side with the 700Mhz that was auctioned off in March 2008 and hasn’t even been used yet.  Sure, the companies will say it isn’t just the license fees - lots of hardware and labor has gone into making that spectrum usable.  Ok, let’s buy that from them too.  Even if we don’t use it (who wants 3 or 4 G networks when you can deploy Wimax) we can always sell the equipment off to other countries that want to use it, and we can get on with building the network of the future, instead of building another antique network.

If Korea can aim for 1Gbps in 2012, with an economic stimulus package to drive us, we should be able to double that in 30 metro areas in the same time.  So when I hear congress complaining that they don’t know how to spend stimulus money in a way that will be a true benefit to our economy, I think they are not asking the right people.