Tuesday, July 24, 2007

Great Krugman article

And you can actually read it here (for now!). Normally I can't link to the NYTimes because their TimesSelect exclusive content thing is so annoying. I actually used to read the Times first thing in the morning, but I go elsewhere now since I know I can't read the op-ed authors.

Anyway, it's a good (albeit short) overview of what's been happening to the United States in terms of broadband accessibility. While the thrust of the article refers to how we get screwed by local our local telco monopolies, it's strange to think of how the internet really gave us a head start into the digital age, and now we're squandering it.

If you're too lazy to click on my link, think about this: remember once upon a time, it was the early 90's, and we were all scared of Japan in particular and, to a lesser degree, Europe? Well, fortunately we had Bill Clinton in office, who did wonders for our economy.

Bill Clinton, among other things, knew that regulatory powers can have a powerful positive impact on an economy, a notion unheard of in today's discourse. Regulation shapes entire industries, and without it, we end up with industries which are susceptible to shock (airlines), and tend towards stagnation rather than innovation (telecommunications).

The most important of these two is the ability to change and adapt - it's what pushes modern ideas and technological innovations into the hands of consumers. Where would we be if our old-school phone companies were not classified as common carriers? They could have restricted the use of dial-up modems, effectively cutting off a half generation from the chief use of modern computing - networking.

Although this move would have delighted my parents, who really didn't like to pick up the phone and hear that godawful high-pitched squealing, there's honestly little chance I would even be blogging right now if not for my fascination with this new form of communication at a young age. I mean, sure I was into technology in general, but until we got a modem, I didn't really see the point of computers besides games and doing boring adult stuff. But once we got one, I was scouring over the back pages of Computer User, looking for new BBSes to dial into, chatting with hot babes on AOL 3.0 with my 40 free hours, and unsuccessfully trying for hours to connect to my friend Evan's computer for an online game of Bolo.

Of course, the landscape has changed since then - broadband access is ubiquitous in major metro areas, land lines are regarded as archaic, and I watched a guy check his myspace page with his cell phone the other day. But the pendulum is swinging in the opposite direction. Existing telecommunications monopolies see no reason to lay more fiber or improve service for the last mile. We are steadily losing our advantage in a globalized economy where communication is king (and transportation is queen).

In fact, I'd even argue that our only major exports are cultural - the outside world may dislike our politics, but they love our entertainment (and we'd love theirs if they could get a foot in the door!). Because of this, it's more important now than ever before to give our intellectual property (IP) creators a break. Internet distribution of IP will be champ one day and we'll all laugh at our HD-DVD vs. Blu-Ray format wars. Our kids will say "you watched movies on these discs? With that player that cost HOW MUCH? You got PWNED!!!!1!"

But this innovation is unlikely to occur here in the United States. But since deregulation leads to monopolies, we're stuck buying physical DVDs that are easy to pirate, expensive to ship (relative to the cost of transmitting the data), and which give lawmakers and IP lawyers a handy scapegoat against a certain country which has become a manufacturing powerhouse. Seriously, look around your surroundings - almost everything is made in China, why shouldn't they be the best at making DVDs?

The innovation, and later the industry it builds, and the money that comes with it, will come from somewhere though. Google is America's great hope - they've been buying lots of dark fiber for something, but no one can figure out what. Our current broadband speeds are less than 10 percent of what Japan runs at. You can be sure they're finding good ways to put it to use, while we click aimlessly from one grainy YouTube video to the next.

end rant

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