Thursday, January 26, 2006

Telecommunications Regulation

For this week, a letter I just wrote to Congressman George Radanovich:

You're not personally my representative, but I just read at that you are on the committee that is tasked with rewriting our telecommunications laws. I have some ideas on the subject that I hope you might consider.

The problem in the existing market that I see is that the companies that own the lines are currently permitted to require that we buy, for example, local telephone service if we want DSL Internet access, or charge more for Cable Internet access if we do not also subscribe to Cable TV. There is also a dearth of wireless broadband options where I live; I don't know if this is due to economic realities or regulatory barriers to potential providers. If it is the former, I am patient, and recognize that it takes time and money to establish services. If it is the later, this is your opportunity to do something about it.

Ultimately, I would like to see a total separation of transmission and content, though I don't know if this is doable in the current round of regulatory revisions. What I mean is, I pay the "internet company" for access to the internet at large, and I pay *only* for that service--nothing else. Then, I can get telephone switching from any IP telephony company (for example), and/or I can get video content from any video multicaster, and/or I can subscribe to any service that requires a data connection between myself and a provider.

I'm not too concerned about price gouging at the "last mile." Certainly, at the moment, SBC and Comcast are the only (reasonably priced) broadband providers in the city of Fresno, but once PG&E gets into the action, that'll be a third option. Do what you can to remove regulatory burdens to the use of the electromagnetic spectrum (wireless) for data transmission. That will up the competition considerably, and should lower access prices. Whatever you do, put up as few barriers (zero, if possible) into getting into the the internet access business, by whatever data channel is available. I don't care if someone finds a way to use the sewer system to provide access; make it legal.

Another thing you might consider is requiring that service contracts state not what can be done with the transmission capacity, but HOW MUCH transmission capacity is being sold. This would open the market to such things as a subscriber opening his home wireless network to neighbors, for a fee or for free, as he sees fit. Note that this does not authorize the sharing of *content*; the cable company (or whoever) would still be free to say only one household is allowed to watch cable TV. However, my network is my network, and I should be allowed to permit access to whom I will; the Internet Company shouldn't be able to tell me what traffic, and whose, I am allowed to transmit on a connection I pay for. Make them sell personal bandwidth, not personal access.

A third thing I would like to see is the Internet hosting two different levels of data transmission service. Basic TCP/IP would be carried along the fastest path it can find for no price other than an access fee. Then there should be a second level of service, a "preferred traffic" level of service. This would be a service that could find a path of guaranteed bandwidth from point A to point B. The sender would pay extra for the guarantee, according to how the owner of each line prices preferred traffic. A protocol could be developed to allow the sender to search for the cheapest path that'll get the job done, and combine the billing via his access company.

This would open the content provision market wide open, while still keeping basic services like E-mail and web cheap. Presently, transmission of high bandwidth content (video, for example) is limited by the amount of traffic on the internet, and there is no differentation in importance between one packet and another. Basically, it's SLOW. By allowing people to pay extra for guaranteed on-time delivery of packets, those that needed extra bandwidth (such as video providers) could pay for it, passing on the expense to their customers, while still keeping basic TCP/IP service cheap.

The profits derived from preferred traffic could then be used increasing the amount of bandwidth available, which is good for everybody involved.

Whatever you do in this round of revisions, operate under the assumption of liberty. Minimize the amount of government regulation, while keeping in mind the fact that a private monopoly (particularly a government protected one) has as much power to trample liberty as a government does. Try to maximize the freedom of all the people: those who own the lines and provide access, their customers, and those that choose not to participate.

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