An ideal future communications infrastructure, how do we get there, and what is stopping us!

An ideal future communications infrastructure, how do we get there, and what is stopping us!

by: Rusell McOrmond

Whenever the discussion of “Net Neutrality” comes up we often get stuck with how the current network is configured, who provides it, and other historical issues. I would like to toss out that history for a moment and offer what I believe to be an ideal, talk about transition issues, as well as some of winners and losers in that transition (and thus who the greatest opponents are)

Future network infrastructure

Imagine a municipal ultra high speed network (Fiber to the premises/Home, or whatever future technologies may be even faster) that allowed the city residents to make arbitrary connections from their home to other points in the city. Sometimes they would connect to other citizens, and other times they would connect to companies.

These companies would offer a wide variety of services, mirroring many legacy services and having the ability to innovatively create more.

What we currently think of as “phone” service would be handled by competing companies that offered directory services and voice (and possibly video for video phones) connectivity between municipalities, as well as gateways to legacy “phone” networks (domestically and internationally). Voice communication between municipal residents could go point-to-point without the need of an additional intermediary.

What we currently think of as “television” service would be handled by people being able to directly subscribe and connect to various networks individually. I may be a fan of CBC and thus I would have a subscription with them. Individual community based stations would be relatively cheap to set up compared to the current system which either needs wireless transmitters or an agreement with both a cable company and the CRTC. Like the voice services, there would be competing companies offering the service of bringing in “television” stations that are not part of the networks who offer their stations directly in the municipality.

Switching from any service a company offers to a competitor should be very easy given the connection to ones home is entirely neutral to any company.

Transportation and utilities offer a path to this ideal

What I consider to be the ideal should sound familiar, as it is the system we use for our ground transportation system and many utilities including electricity. We have municipally owned/managed road infrastructure which allow us to travel between any two destinations within the city. We don’t have a “Walmart road” as well as a “Canadian Tire” road running to our homes like many of us in Ontario have a “Rogers” and a “Bell” wire running into our homes. The municipality — unlike the legacy phone and cable companies — doesn’t claim some alleged right to actively inspect the contents of all our vehicles or “traffic shape” roads based on whether they like the contents of our vehicles or not.

The electricity system in Ontario offers a more detailed example. In the past, electricity generation and distribution were within one public sector owned company. This was appropriately split about a decade ago. We now have public sector owned distribution, with competition for generation. We have Hydro One, which is wholly owned by the Province of Ontario, and Ottawa Hydro which like other municipal distribution utilities is incorporated as a business with the City of Ottawa as it’s shareholder.

This separation of generation and distribution would be analogous to a separation of transit/hosting and other higher level services from municipal network distribution. The municipal communications utility should be offering point-to-point communications services within the municipality, but should not be allowed to offer transit (bandwidth out of the city) or hosting services such that it is not competing with the private sector.

Commentators that focus on the money to build the infrastructure, and the claim that they own the wires and thus should be able to profit from them in any way they wish, are trying to bamboozle you.

First, many of the infrastructure costs relate to transit, and thus are not included within the municipal utility model I am proposing. There are considerable ongoing costs to maintaining cables under the oceans, or satellite or other long-range communications. This is a type of service that should be open to competition, something that is not possible today since transit services are bundled with the municipal distribution service. For the same reason that Ontario Hydro was split into multiple component parts, our current private sector “owned” communications system should be split into its component parts to allow competition. The current bundling and private sector ownership of that “last kilometre”/”last mile” into the home is causing many anti-competitive problems, and stifling innovation.

The other question relates to competing ownership interests. The wires which are put under our municipal roads and connect to our homes are put there with the permission of the municipality. While Bell and Rogers may have paid for the copper, they do not own the land that that copper is running through. The superior ownership right is actually in the land, not the wires.

The ultimate way to solve this conflict is for the municipality to own that infrastructure under the roads. The municipality already manages multiple conduits for water, sewer, and electricity, with the addition of strands of glass (high-speed fiber connections) being an easy addition.

Existing infrastructure

Most people in Ottawa would be surprised that we (the City of Ottawa) already own a fiber communications network called Telecom Ottawa. It is part of Hydro Ottawa Holding Inc., with the City of Ottawa being the shareholder.

Telecom Ottawa is not currently configured as I envision, but it is a start. It currently charges rates that mean that its services are only within the reach of companies needing the bandwidth. While it will offer point-to-point communications services between points in the region, it also has bundled Internet transit services. Competing television and “phone” transit services are also not available as points on this network, meaning that it is not possible to replace your Bell and Rogers copper with a Telecom Ottawa fiber connection and easily connect municipally to competing “voice” and “television/multimedia” services.

The really bad news is that the municipality doesn’t have a future facing vision for communications, and plans to sell Telecom Ottawa to Atria Networks LP. Rather than seeing our communications infrastructure mature as our ground transportation and utilities have, we seem to be headed in the opposite direction.

The political debate

While the model I propose promotes a highly competitive private sector to enable a more vibrant future knowledge economy built on basic infrastructure, the legacy providers of various services object. In my model the legacy phone and cable companies would no longer be able to leverage their previous monopolies in the “last mile” to impose special interest restrictions. Prices would go down and innovation would go up as an direct effect of competition. It is unlikely companies like “Bell” or “Rogers” would continue to exist in this free market competitive environment.

Incumbents in the content industry (major motion picture and television studios, major label recording industry) are also not happy. The Motion Picture Association of America is already speaking out against Net Neutrality, legitimately worried that having a neutral network will open up the legacy motion picture industry to much needed innovation and competition. We will have far more creativity with more money going to creators if composers, authors, performers and makers of entertainment content are able to skip the legacy intermediaries and reach audiences directly. While the legacy industry associations are opposed to Net Neutrality, they would likely be appalled by my proposal of going much further and revoking monopolist private sector ownership and control from the “last mile” communications infrastructure to our homes and businesses.

Not surprisingly, the Independent Film and Television Alliance has a very different view that is supportive of net neutrality, making obvious that this is about anti-competitive issues. The MPAA position is clearly not about protecting the interests of film and television producers, just the narrow special interests of the legacy major studios. While the phone, cable and major entertainment industry lobbiests often claim they are protecting a free market capitalist system, nothing could be further from the truth.

Any innovation and progress brings with it many winners and some losers. We didn’t cry for the horseshoe and straw-bail hay companies that were nearly wiped out by the advent of the automobile, and we shouldn’t cry for the legacy phone, cable, motion picture or recording industries as we modernize our communications infrastructure to better enable competition and thus more creativity and innovation.

This will be a very hard fought battle to allow us to move forward. The legacy phone, cable and entertainment industry are very powerful political forces. Any list of top lobbiests in Canada or elsewhere is a whose-who of those working for the legacy phone, cable (broadcast undertakings) and entertainment industry. This makes sense given these are industries that have to continuously confuse politicians in order to justify their very existence in a world that would otherwise modernize and replace them.

I believe the current opposition by incumbents to simple Net Neutrality rules for Internet services will likely backfire for them. The more people get upset about violation of the end-to-end design principle for the existing neutral Internet, the more people will see the necessity for the vision I have presented in this article.

Note: The description for a recently released book For Sale to the Highest Bidder: Telecom Policy in Canada suggests it will discuss this issue. Not having read it yet I cannot offer specific comments. It does have two articles under the heading of “Net Neutrality”, one by Dr. Michael Geist and the other by Ben Scott. Other Contributors include: Maude Barlow, Genevieve Bonin, Bruce Campbell, Andrew Clement, Phillipa Lawson, Graham Longford, Marita Moll, Amelia Bryne Potter, Marc Raboy, Leslie Regan Shade, Mel Watkins, and Julie White.

View the original at: http://blogs.itworldcanada.com/insights/2008/03/20/an-ideal-future-communications-infrastructure-how-do-we-get-there-and-what-is-stopping-us/