Entries Tagged 'politics' ↓

With the release of the FCC’s National Broadband Plan, Google’s announced intention to build gigabit fiber-to-the-home networks, and Verizon’s indications that they are not likely to be expanding their FIOS service to new areas, it’s a good time to review where we really stand with fiber.

The Real Reasons You Don’t Have Fiber

What are the real economics of broadband infrastructure? It’s not so simple as market opportunity, investment, and subscribers; Verizon and Comcast have different regulatory histories and see the world differently apotheke-zag.de. Google, as a potential new entrant, has completely different motivations.

Let’s take a look at the regulatory background, and then get a sense of what’s really motivating Verizon, Comcast, and Google.

Regulatory Background

We have gradually come to think of Verizon and Comcast as equals: big, for-profit telecom companies — competitors for TV, Internet, and telephone service. But they got to their current positions through very different routes. Here’s a brief (and rather incomplete) history.

In 1984, the former AT&T was busted up into seven Baby Bells: Ameritech, Bell Atlantic, BellSouth, NYNEX, Pacific Telesis, Southwestern Bell, and US West. Terminator-like, these companies have been spending the last 26 years reconstituting themselves, merging into very large firms. Bell Atlantic changed its name to Verizon in 2000 after acquiring GTE.

Telecommunications regulation in the United States has a long history and reflects theory originally applied to railroads and other public utilities. The idea was that communications was a public good and because the network had to be large and interoperable to be effective, it was best served by a natural monopoly. So, assets like public rights-of-way were made available for the monopoly to use, in exchange for an agreement to provide Universal Service, covering the entire population.

To keep the monopoly from charging unreasonable prices, regulators mandated that their services should be marketed at cost, plus a reasonable and sustaining profit margin. This means that there is no incentive for them to keep costs down; in fact, the higher their costs, the more raw dollars they make.

Verizon today operates under this kind of regulatory background, which was outlined initially in the Communications Act of 1934, and then amended by the Telecommunications Act of 1996 — which has subsequently been eroded and modified by case law and other FCC actions.

The FCC, under Bush-appointed Chairmen Michael Powell and Kevin Martin, tended towards the opinion that the best way to foster competition and innovation would be to empower a small number of well-capitalized firms and let them compete together in the marketplace.

Comcast, for its part, came together very differently. Cable TV franchises were primarily granted by local municipalities, starting in the 1950’s. Comcast acquired dozens of these small firms, each with their own regulatory agreements with cities and counties. By 2000 or so, this aggregation started to resemble the sort of “large firm” that the FCC thought could be an effective competitor to the telephone companies.

So that’s how we got here. Verizon is heir to the top-down, cost-based monopoly regulation subsidized by the Universal Service Fund, which requires that it provide telephone service even in rural areas. Comcast is the product of the roll-up of dozens (if not hundreds) of small cable TV firms. Now let’s take a look at their interests in the current landscape.

Verizon

Verizon, in many ways, is just the current-day incarnation of a big chunk of the original AT&T. It’s still the primary telephone infrastructure provider and the bulk of its physical wiring plant is copper. It operates the same switching facilities that AT&T did back in 1984. In many important ways, nothing has changed.

What about FIOS? Isn’t Verizon innovating there? Aren’t they making this investment to “make money?” It’s complicated.

Verizon made the decision to install FIOS primarily to block competition. The Telecom Act of 1996 required that telcos make copper wireline infrastructure for competitors to run alternative services. This is where alternative telcos like Cavalier, Covad, Adelphia, and many others came into the market. You’ll notice that almost all of those companies are now defunct or severely hamstrung.

This is in part because Verizon (and its peers) set out on a strategy to make a competitive business model all but impossible. FIOS was part of that strategy.

When Verizon installs FIOS, they almost always remove the copper wires that could otherwise have been used by competitors; and this has effectively shut them out.

Verizon has spent over $20 Billion to build out FIOS in its service area. Ostensibly this might look like “investment in innovation” to observers. But in fact, this spending was mostly done to block competitors and to destroy the pro-competition provisions of the Telecom Act of ’96.

It should thus come as no surprise that Verizon has recently announced that they are unlikely to expand their FIOS network further. This isn’t because they can’t get more new subscribers in new areas (like downtown Boston, which is still not served); rather, it’s because they have calculated that the costs of future expansion exceed the downside risk of lost profits caused by competitors in the areas that remain.

They have put FIOS in all the places where it was either easy to do so or where the competition was too strong to ignore. Now that the competitors are mostly defunct or severely weakened, the threat is just not there to justify expansion.

Like feudal warlords, they invested just enough in FIOS to block out competitors, rejigger the regulations, and maintain a status quo of mediocrity. And we’re supposed to think this is innovation?

Comcast

Comcast has different problems. Because all of their regulatory agreements are negotiated with individual municipalities, it’s more difficult for them to make investments across their entire footprint. This is why Comcast often rolls out new products and services in trial communities, and then rolls them out to new areas one at a time.

Comcast does have a very large television service footprint, and their acquisition of NBC and other content providers over the years, like HTS, is an attempt to establish themselves as a vertically integrated entertainment provider. They control the entire stack, from the physical cable, to the viewer, to the content itself. This means that they are protected from threats from content providers who might try to command high rates for popular content. Disney (who controls ESPN and ABC) often finds itself in battles about rates with cable providers. Acquiring NBC/Universal means one less potential threat of rate hikes for Comcast, and higher overall profits.

But Comcast’s physical plant is dominated by aging coaxial cable infrastructure. While local head-ends are fed by fiberoptic backbones, local distribution to the home is through co-axial cable, which can degrade in performance when it rains, is subject to lightning damage, and can only go so fast. Fiber-to-the-home is vastly superior, but it would cost Comcast billions to upgrade its plant. In the absence of competitive pressure (such as that which was faced by Verizon), they have no incentive to do so. Instead they are happy to push their existing plant as hard as it can go, using standards such as DOCSIS 3, and invest in fiber-to-the-home infrastructure only as necessary or convenient.

Google

Google has recently announced that they would like to spawn innovation, and potentially build out gigabit fiberoptic infrastructure in one or more communities in the United States. I helped organize Baltimore’s municipal response to Google’s Request For Information for this project.

Google’s proposing something very different from what Verizon and Comcast offer: an open-access network, over which new entrants could provide Internet or other services. This is exactly the paradigm that Verizon has fought to destroy with FIOS.

Comcast has also fought open access repeatedly; before Verizon settled on FIOS as its primary anti-competitive strategy, Verizon tried to force cable companies to become subject to the same kind of infrastructure-sharing to which it was subject under the Telecom Act of 1996.

And Comcast fought this effort mightily; in 2002, I testified before the Maryland House of Delegates in support of a bill that would force Comcast to open its network, and Comcast’s lobbyists managed to defeat it.

Also in 2002, working alongside Verizon-supplied lobbyists, I testified before the FCC with TCP/IP co-inventor Vint Cerf (now a VP at Google) arguing that cable companies should be forced to provide “open access” to their networks because it would promote competition and entrepreneurship. At that hearing, FCC Commissioner Robert Pepper made it clear that the FCC believed that Verizon and Comcast could provide all the competition we would ever need. We see how that’s turned out.

To date, there has not been any significant open access network deployment in the United States. And with the decline of competitive telco-based services, telecom innovation has now stalled entirely. It’s time for something new.

Net Neutrality

Google has a different potential problem on its radar. In the US, Comcast and Verizon control access to a large percentage of its customers. Currently, the Internet operates under a doctrine of “Net Neutrality,” which is to say that customers and Google all just pay for access to the network, and each can communicate freely with anyone else on the network.

Various telecom executives (most notably former AT&T CEO Ed Whitacre, now CEO of GM) have argued that companies like Google should no longer get free access to their customers. Folks like Whitacre believe that the natural role of a company like Verizon or Comcast is to act as a toll-gate, charging both content providers (Google) as well as customers for access to each other.

As you might imagine, Google heartily opposes this idea: it could dramatically increase their costs and would destroy the “level playing field” which has dominated the Internet from the beginning. Startups could be stifled because they might need to negotiate an agreement with broadband providers to get access to customers. This is a war that Verizon and Comcast appear ready to start, and people like News Corp’s Rupert Murdoch are fanning the flames.

Google’s Fiber Plan

Google’s announcement that it intends to build ultra-fast open access fiber networks is its declaration of war against the threatened end of net-neutrality. Further, this is a productive use of Google’s vast stockpile of cash; it’s something tangible it can do to ensure its market position.

And it’s a move that’s ideologically compatible with its mission. Google genuinely believes that the expansion of a fast, net-neutral Internet has positive effects on society, and it’s also good for its bottom-line. More people online means more ad-views which means more advertising, and more dollars for Google. There’s no downside for them; it’s an expensive proposition to be sure, but it’s less expensive than paying for access to customers in a world without net-neutrality.

By promoting itself as a good citizen, wrapped in the banner of open-access, innovation, and net-neutrality, ideologically-sympathetic regulators such as the FCC’s new Obama-appointed Chairman Julius Genachowski are likely to view Google’s approach favorably. This would allow Google to establish a vertically-integrated, long-term market position which would be hard for Verizon or Comcast to disrupt.

And the kicker? The open-access network Google’s proposing really would promote innovation and entrepreneurship. The United States is ranked 15th in broadband penetration worldwide today. This is a chance to change that.

Don’t believe that Verizon or Comcast will make these investments unless forced to do so. And while Google may also feel it has no choice but to build its own network, Google at least has a vision that goes far beyond just sustaining a mediocre status-quo; they truly believe in the level playing field that has given birth to so much innovation.

It’s time for America’s bandwidth to finally match our ambitions and our talent. Let’s go Google!

I recently wrote an essay about how our educational system is an artifact of the industrial revolution, designed to produce cogs for a machine that no longer exists.

It received wide circulation and a lot of people weighed in with their own ideas about what’s working in education. My mother started a school when I was young, and I’ve also been in the process in the last year of evaluating school choices for my kids (who are entering middle school) so I’ve had a good deal more recent first-hand exposure to the question. And it’s got me thinking.

Play and Exploration

People learn by interacting with the world around them and by following the ideas they are curious about. Think back on your school career and try to name three teachers or three projects that really inspired you and got you excited. You can probably do that, but if I asked you to name four or more, you’d probably be at a loss.

Real learning doesn’t occur through mindless rote tasks or in any context where one is teaching to a test, and it almost certainly can’t occur in huge classes.

Kids grow when they are inspired to inquire into a subject themselves; sometimes that happens by way of a teacher, parent, or role-model, and sometimes it happens through reading or another kind of exposure to an idea. I won’t claim it’s causal, but there is a correlation between the number of books in a home and later success in life. While it is equally probable that the kinds of families that value books are also the same homes most likely to properly nurture a child, there is something wonderful about being surrounded by books and being able to select just the right book at just the right time.

Learning, at its best, should be a kind of just-in-time delivery system for knowledge and discovery.

There has been some debate as to whether schools should make any pretense of having a curriculum at all, or just focus on a kind of resource-rich play. The New York Times recently wrote a piece about how play is at the center of learning. A friend told me about the Sudbury School which has no curriculum and lets kids make up the rules. And if you read the literature, Sudbury “graduates” are as successful as anyone else.

Learning In Spite of the System

If you study the evidence, it becomes clear that the only real learning that happens in our traditional school environment happens by accident — as a side effect of our system, not as a primary result of our system. If this is true, our system is mostly wasted energy – noise and light – and not actually designed to solve the problem it purports to solve.

What do I mean by “learning by accident?” If you can count on one hand the number of teachers you had that inspired you, then your learning was by accident. If you can remember maybe just two projects from your school years that meant something to you, you were learning by accident.

The tragedy is that in our worst schools, those accidents never occur. Students slog zombie-like day after day through halls that threaten their safety, misdirect their higher calling into self-defense and trivial pursuits of one-upmanship, and generally burn them out on life and its possibilities. It’s no wonder that the survivors of this system (it’s hard to use the word “graduates” when many do not, and the process is more a trial than a system) tend towards cynicism and a zero-sum view of the world. There is no time or place for higher thinking when safety is in question.

Our very best schools – the schools in higher income areas, or our private schools – simply are rigged to increase the odds of “good accidents” occurring at a higher rate. These schools typically do not fundamentally alter the design, though, they just increase the odds that something good might happen inside their walls — through parent involvement, better teachers, and a community that is generally more able to support a learning environment.

So even our best schools are only, perhaps, 30% as efficient as they could be. The rest is all noise and heat and light. How can we unleash that untapped 70% of energy that we lose to the inefficient design we currently call school?

Homeschooling or the Sudbury method offer potential answers. However many alternative approaches carry baggage from the culture wars that make them unpalatable to the population at large, or include biases that make them less than effective.

Ideology and Indoctrination

Thanks to Hitler, it is still today illegal to home-school children in Germany. Indoctrination was such an important part of his new totalitarian state that he dared not leave it to chance. We have something similar going on in our country today. Our school system is a kind of indoctrination. We need to ask serious questions about whether we believe in the values it imparts, or whether it is something more sinister.

The extreme left and right get it wrong. This is not about warmed over hippie ideology, and it’s not about right-wing religious nuts opting out to preserve a cult-like bubble around their children. It’s also not about non-religious right-wing people rebelling against the abuses of teacher unions or big government. Education is too often co-opted by these sects and it’s counterproductive.

The real challenge is how to design an approach — which may not look at all like public education as we know it now, so stop reflexively bashing it — that scales up and works for moderates. And by “works” I mean delivers an level of efficiency closer to 90% rather than 30%, and is divorced from ideology.

Design is an opportunity to incorporate, or not to incorporate, ideology. Would you design a right-wing fork? Or a liberal toaster? Is it possible for us to design an educational approach that is simply functional, and light on ideology? We owe it to our kids to do so.

Despite all the talk of Government 2.0 and transparency, is it really possible to change the current system from within to tackle the challenges of our day? Perhaps not. One leading expert has expressed serious doubts.

We can succeed only by concert. It is not “can any of us imagine better?” but, “can we all do better?” The dogmas of the quiet past, are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise — with the occasion. As our case is new, so we must think anew, and act anew. We must disenthrall ourselves, and then we shall save our country. – Abraham Lincoln, Address to Congress, December 1862

Why is it that we seem completely ill-equipped to handle the central issues of our time? I believe it is because we misunderstand the nature of design and execution and in important, tangible ways we have abandoned design in favor of only execution. This has removed an important weapon from our arsenal, and it is unclear that we can afford to live in our world without it.

Design vs. Execution

What do I mean by Design (big D) in the context of government? The founding fathers were designers. They set out to imagine a governmental mechanism that would outlive them and ensure the core values that they held dear. So, in a real sense the American constitution (and all such similar instruments) is a design object, and executing against it produces a variety of effects. Most of these effects are positive (free speech, equal protection, etc), while some are negative (a silly disproportionate influence of corporations in politics, corporate personhood).

Execution, by contrast, is the everyday operating of the governmental machine as it was designed. This includes the daily activity of Congress, the White House, the Supreme Court, and the like. Sometimes these entities engage in design behavior (making laws, interpreting them, creating policy, setting precedent by imprisoning people without trial) but mostly they do the quotidian business of government: services, revenue collection, law enforcement.

Our government is now 234 years old. Is it possibly time to reconsider some of its basic precepts? Could we possibly engage in new, first-principles design work that would alleviate some of the most undesirable effects of our system?

Arguments Against New Design Activity

James Fallows in a recent article in The Atlantic suggests that the cumulative corrosion of so many special interests on the machine of government has brought it to a standstill. He suggests that it may be time for something like a new Constitutional Convention, but points out that any attempt to conduct such a convention would be a freak-show of unprecedented proportion, and he’s probably right. If you think the special interests are bad now, wait til you give them an opportunity to participate in a founding document!

In the state of Maryland, every 20 years we have the opportunity to vote to have a constitutional convention. This year is one of those years. But while some are calling for such a convention, most politicians consider it “an exercise in futility,” citing cost as the key factor. Why cost? Because so many people would need to be involved.

But this is surely a bad state of affairs. The Maryland constitution is huge, much bigger than the US Constitution, a burden on everyone that has to execute against it, and loaded with unintended effects. Yet, the critics are probably right: if we approach our design activities with the same appeal to the lowest common denominator as we have our execution activity, a new design would be a circus.

Fallows and Maryland Senate President Mike Miller both suggest that we plod along with our broken foundations because it is the only moral thing to do and even though we may have a tough time executing our way out of our design shortcomings.

Gaining Clarity About Design vs. Execution

A few days ago I wrote a blog post about how our educational system is broken, and at the end I cited several bullet points suggesting “core values” for the design of a new system.

Several people shot back in the comments with ways in which the current system does embrace some of the core values that I suggested, at least some of the time.

And it has struck me: we’re talking about two different things. I was talking about a new, imagined design. Some people thought I was talking about how the current system needed to change its execution. Those are two very different things and it began to dawn on me: our historic aversion to new design activity has caused us to push Design Thinking out of our political debate entirely.

Today, all political debate is around execution (activity) and not design (legacy).

We Must Disenthrall Ourselves

Lincoln said it best in 1862. We must disenthrall ourselves; disenthrall ourselves with the strengths of our system’s design, and disenthrall ourselves with the notions of the past. In order to move past where we are, we need to engage in new, imaginative design thinking and do something with it.

While new constitutional conventions are probably not the most productive approach, we must make ourselves open again to talking about design activity and understand the difference between execution and design. We must try to understand how we can conduct design activity through execution of our current system, and we must gain clarity about the limits of that prospect.

It is entirely possible that we cannot meaningfully affect the design of our system by execution alone; we may need to appoint some Great People to revise our system in a way that we all can live with. While this is a frightening thought when considered from inside the confines of our current government, it may well be necessary.

Jefferson anticipated this conundrum and believed occasional revolution would be necessary. Can we prove that we’ve learned something from his design and rise to the challenge of repairing it without bloodshed?

Thanks to Sir Ken Robinson, from whom I stole this very apropos Lincoln quote which he cited in his recent talk at TED 2010.

Since the industrial revolution it has been widely assumed that sustained economic production is best arranged through corporations. After all, corporations are the only entities capable of acquiring and operating the capital-intensive means of production required in an industrialized state.

Because of the reliance on the corporation, we set out to design an educational system in its mirror image. The linear journey from first to twelfth grade, then bachelor’s, master’s, and doctorate degrees systematized learning in a way that turned people into interchangeable parts and valued mobility.

Attainment of the highest grades of education confers the ability to teach within it, for anyone so dedicated to the educational treadmill is preselected to share its values.

The large scale corporation upon which our industrial educational system has been built no longer exists as it once did in the United States. However, we continue to build cogs for this machine as though nothing has changed.

Death of the Corporation

When large scale corporations first came to be, they were built around the idea that people can achieve more by investing together than they can alone. This is intuitively obvious when you consider that the endeavors they were undertaking were things like railroads and shipbuilding.

Through World War II and into the 1970’s, most large corporations had balance sheets to match: they used big iron, or made big iron. But starting particularly in the 1980’s, corporations started to be more about ideas than about capital, and the challenge turned to removing things from the balance sheet. Winning corporations maximized profit on minimal assets (and liabilities). Production (big iron) was moved to China, Mexico, and elsewhere and off of balance sheets.

The logical conclusion of a process like this is an Enron or a Goldman Sachs; one built predominantly on ideas and on trading, with almost no physical assets. The bulk of the workers we were producing with our educational system might be suited for a job at GM, while Enron needed every last PhD to keep its web of trades flowing. And it turned out that in the end neither GM or Enron was a long term proposition.

So here we sit with the same educational system we had in 1910 producing people for the economy of 2010, when the economic landscape has obviously shifted dramatically.

The Lie of Mobility

Think 1955. If your father was told, “Bill, we’re transferring you to Kansas City,” he went. And off you’d all go, uprooting children from schools, breaking apart extended family, divorcing people from a personal understanding of place. But this was all OK, and in service of a great big beautiful tomorrow! Corporations borrowed the idea of “transfer” from the military, and as much as the “transferees” might not have always enjoyed it, they endured it because they were convinced that corporations (like the military) were a kind of higher calling.

Fifth grade in Kansas City was pretty much the same as fifth grade in Boston. People adjusted. And they forgot about their previous home, or at least came to not miss it, like an animal being sent to market learns to adjust along the journey.

After graduation from high school, you’re faced with a “choice of college.” You’re asked inane questions about what you want to study (unanswerable at that age), shown some brochures, and make a fundamentally random choice about where you want to spend the next four years of your life. And you go. And you study something (probably not what you set out to study). And it’s OK. You meet people, and your life takes some path.

Regardless of the particulars of whether you get a job doing what you studied or when that actually happens (it often doesn’t), one thing is true: by this time in your life you’ve probably been uprooted once or more and had your home ties effectively severed.

Our educational system is designed to promote an ersatz fungibility of place and to denigrate people’s relationship to extended family by offering instead a false idol of corporate, industrial superiority. The fact is that place is a kind of human right, as is extended family. Any system that asks you to devalue a relationship with place or with extended family is evil.

It might be arguable that at one time, the educational system combined with its corporate industrial twin provided better overall outcomes for more people than the agrarian model that preceded it, but it does not logically follow that a new model cannot supplant the current one. This is particularly true when the corporate landscape is now more corporate than it is industrial and the emphasis has turned to creativity and ideas over machining and production.

The idea that place is fungible is one that belongs squarely in the last model and should be jettisoned going forward.

Why We Are Susceptible to Manipulation

Behavioral economist Daniel Kahneman suggests that we have two selves: an experiencing self and a remembering self. The experiencing self perceives the world in the here and now. Your experiencing self lives in the present and is happiest spending time around people you like. The surfer who just lives to be out in the waves is primarily existing through her experiencing self. The experiencing self, it turns out, can be happy just about anywhere and in any weather. Just find people you like and the rest follows.

The remembering self is another animal. The remembering self cares about story, and about appearances. According to Kahneman, your remembering self might trick you into taking a two week vacation instead of a one-week vacation because that’s a better story, but in fact you remember them pretty much the same way because there were not many “new” experiences in the additional time spent.

Your remembering self cares about money and mobility deeply. Why? No one wants to be remembered as the person who “didn’t do anything with their life.” Getting rich and moving around a lot adds dramatic, tangible plot-points to your story, which comforts your remembering self greatly. But your experiencing self can easily be less happy. What if you are unable to turn your money into people you enjoy spending time with? What if you move away from the people and places that bring you joy?

Is it so hard to see now why so many wealthy, jet-setting people are unhappy and commit suicide? Their remembering selves have spun great stories; their experiencing selves are miserable.

A Path Forward

Creativity researcher Sir Ken Robinson suggests that we need to reinvent our educational system upon a more agricultural model, rather than the industrial model. I’m not totally sure what that means yet, but I do agree that in the developed world we must adopt these values:

• Creativity is valued
• Learning is non-linear
• Gifted children have a place to excel
• Many learning styles are celebrated
• Children are not medicated for ADHD and the like
• Children have a right to fresh, whole food
• Place is valued and cherished
• Regions become self-sufficient

There is an emerging emphasis on regional innovation and regional self-sufficiency as an economic development strategy; this is a good start. But the long term task is to invent entirely new models for life-long education. What we’re doing now is building cogs with very particular defects for a machine that no longer exists.