To ‘Net Neutrality’ Advocates: Where Is the Enhanced Internet Going to Come From?
From a subscriber-only Wall Street Journal editorial last week:
“In 2006, the S&P 500 telecommunications sector was the strongest performing sector, up 32% over the previous year,” said Mr. Martin. “Markets and companies are investing again, job creation in the industry is high, and in almost all cases, vigorous competition — resulting from free-market deregulatory policies — has provided the consumer with more, better and cheaper services to choose from.”
Much of this growth has been fueled by increased broadband deployment, which makes high-speed Internet services possible. The latest government data show that broadband connections increased by 26% in the first six months of 2006 and by 52% for the full year ending in June 2006.
Also noteworthy, notes telecom analyst Scott Cleland of the Precursor Group, is that of the 11 million broadband additions in the first half of last year, 15% were cable modems, 23% were digital-subscriber lines (DSL) and 58% were of the wireless variety. Between June 2005 and June 2006, wireless broadband subscriptions grew to 11 million from 380,000.
This gives the lie to claims that some sort of cable/DSL duopoly has hampered competition among broadband providers and limited consumer options. That’s the charge of those who want “network neutrality” rules that would allow the government to dictate what companies like Verizon and AT&T can charge users of their networks. But the reality is that the telecom industry has taken advantage of this deregulatory environment to provide consumers with more choices at lower prices.
Recently, Google has complained that the Net as it is currently configured won’t be able to handle the influx of video that is anticipated in the coming few years. If so, then who is going to build on the current one? Where is the money going to come from to do that, and why shouldn’t those who build it be compensated for what they’ve built?
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UPDATE: You definitely want to read ajacksonian’s comment #1 below on the situation.
During the ‘Net bubble of the 1990’s, MCI did a very strange thing: they took a few months of strong infrastructure growth and projected it out for the future. The result was MCI laying on double its capacity every 6-12 months… and a phenomena called ‘dark fiber’. This was fiber optic cable that had been put in, tested and then had no one that needed it, so it remained unlit. A few years of this and MCI was facing real problems and the result was the buy-out. It took about 4-5 years for all that dark fiber to finally start getting absorbed into the infrastructure, and now it is becoming possible to actually put in a bit less robust forecasts for infrastructure roll-out. The major roadblock to ‘Net growth is address space which IPv6 is supposed to take care of… but, and it is a big ‘but’, is that to get the advantages of that requires a relatively well staged upgrade of the routers, switches and such. The ones who can do that are the major backbone carriers. And if you start doing it, then all the software used by everyone else will *also* need to switch over to IPv6, which is every device using the ‘Net for long-haul use.
Which is every computer out there, basically.
Most of the *NIX’s and some proportion of the Windows machines have the ability to switch over, but how you handle legacy address spaces, parts of the ‘Net that can’t or will not upgrade, and all the rest of it when everyone is not moving in synch… that is a huge problem. Paying for it *isn’t* the problem. Getting everyone on the same playbook *is* and if you offer backwards compatibility, then a number of folks will decide not to upgrade or use routers to handle the IPv6 and then offer IPv4 behind them, which in theory offers up a ton of address spaces there, but then incompatible addressing out to the rest of the ‘Net especially to older addresses not upgrading elsewhere. In *theory* that can work… but the only way to do it is to roll it out and see… So you get the ‘theory and practice conundrum’ setting in.
The actual capacity of fiber optic cable to carry the load isn’t the problem, and WDM and DWDM have allowed in-situ upgrades of capacity just by replacing tranceivers. How you make sure people can *use it* effectively: that is a problem. Notice that the test ‘Net 2.0 has been isolated so that everything is on the same page, technically speaking. What happens when everything isn’t on the same page and using multiple look-up tables inside networks and then inter-networked… fun and games. Lack of address space is the problem. And saying you won’t deliver service to the non-upgraded parts when they are *paying* for service… a non-winner. And so what we have creaks on… the Federal Gov’t is supposed to switch over this year, but it no longer controls the NSF backbone. China looks to take a few years to convert… the rest of the world? IPv4 does have to go… and that has nothing to do with ‘net neutrality’ and everything to do with ability to upgrade globally. With any luck it will be done by 2010-11 before address space for IPv4 runs out.
Comment by ajacksonian — February 24, 2007 @ 7:58 pm
#1, thanks so much for that perspective. I updated to point readers to it.
I am left wondering if Google’s complaint is at bottom that everyone isn’t migrating over to IPv6 fast enough, or if there isn’t something else at work.
Comment by TBlumer — February 24, 2007 @ 8:19 pm