Monday, July 28, 2014

A government protected monopoly is not a private enterprise

When I think of some of the icons of American capitalism, GE, GM, and Google, I think of companies that are in direct competition with the world. Each of these three must allocate their resources in such a way as to provide their services at a price that is competitive with other offerings here and abroad.

Our telecommunications companies like Comcast, Time-Warner, AT&T and Verizon would like us to believe that they are engaged in similar competition, as if they are engaged in the art of private enterprise. To the extent that they are not protected by patents, copyrights, state and local franchise agreements, free trade agreements, anti-union laws, etc, you could say that they are.

For today, I would like to emphasize the point that in their respective domestic markets, each of the 4 biggest telecommunications companies have had the luxury to operate a private monopoly. For every city they operate in has agreed to a local monopoly. For example, When Comcast enters into an agreement to provide cable television service to residents in any given city in the United States, they are granted an exclusive right to do so, in the form of a franchise agreement. That means that no other cable television provider may operate a similar business within the boundaries of that same city. This is a private monopoly.

The same thing is true of the phone services offered by AT&T and Verizon. In fact, before 1982, AT&T had a government granted monopoly on phone service throughout the entire nation. This monopoly was created by government intervention and it was broken up (not completely destroyed) by government intervention. There was a time when you could not connect your own device of choice to the phone line without permission from the "phone company". That's what we used to call AT&T.

Since the breakup of AT&T, every city had the option to choose their telephone service providers. Even then, each city provided their respective choices with a government granted monopoly, a franchise agreement, with terms that could run a whole decade or more.

This is what is behind the facade of private enterprise, free enterprise, or whatever you want to to call it, that the telecommunications giants place before us in the public sphere. When they advertise, lobby, or simply do their business, 100% of the time, they are operating in a market that is guaranteed by the government.

You might protest and say that AT&T and Verizon are in competition with each other. Yes, they are in the mobile phone market. But in the landline business, they have mutually exclusive territories. That includes the internet service business. By the way, we still use landlines and they are not going away anytime soon.

The same thing is true of Comcast and Time-Warner. They both operate in mutually exclusive territories with franchise agreements that have very long terms. To switch from one to another is an incredibly onerous process, one that would take many years to complete. So not only do they have a government granted monopoly, but due to their infrastructure investments, they have a de facto monopoly. Even if a city wanted to change their carrier, it's a long and expensive process to make that change.

This arrangement can have many benefits, but it can also have many pitfalls. Let me see if I can enumerate a few of them: complacency, condescension and corruption. These are all attitudes I have observed in the behavior of each of the telecoms. I would like to work on Comcast today, since I'm a "customer" and I'm also most familiar with them now.

I want to also point out at this juncture that Comcast too, is offering voice service in competition with the incumbent carrier, CenuryLink. While there is definitely some churn between these two very large companies, no serious economist is going to tell us that two competitors is competition. What we have here is called a duopoly, a monopoly between two competitors with government granted monopolies in their respective trades.

This is not free enterprise. This is not even private enterprise. This is most certainly not a free market. But this does explain why cable and internet subscription fees have consistently risen faster than inflation for at least the last 20 years. The latest FCC report indicates that in the recent past, subscription fees have increased at a rate four times faster than inflation. These are no doubt, monopoly rents.

So it is a curious thing indeed for me to see people, serious people, talking about a government takeover of the internet in the context of the debate over net neutrality. A casual review of the history of the Internet reveals that the foundation of what we know as the internet today was created by the Defense Advanced Research Projects Agency, "DARPA", a federal agency in the US government. Isn't that interesting how something so great as the internet was not created by one of those "private enterprises"?

It is even more curious to me to see people railing against the very notion of community broadband and how "government should not be engaged in the business of providing internet service". Yet, these same people make no mention of any of the private monopolies we have in place. So I have every right to express indignation when these same so-called "private businesses" use their monopoly power and rents to buy legislation that blocks communities from creating their own solutions.

This is what I mean by complacency: Comcast has a few extra hundred million laying around, so it can invest in Universal theme parks to compete with Disneyland. Remember, this is the same company that doesn't mind jacking up your rates for cable and internet access 4 times faster than inflation - that's the condescension part. The corruption? That comes when they bought laws in 20 states that prevent cities from creating their own broadband networks when Comcast refuses to upgrade their networks. Or when Comcast (or Verizon) allows their Level3 connections to clog up in order to score a deal with Netflix. Verizon got the next deal. Yeah, those monopoly rents are so wonderful...

This is why community broadband makes sense. This is why community broadband is in operation in more than 400 cities nationwide. This is why community broadband is the future.

Friday, July 25, 2014

Thou dost protest too much, Comcast, Time-warner and Verizon

Consider for a moment, the enormous market power of the top internet service providers, Comcast, Time-Warner, Verizon and AT&T. Each of them are very profitable private concerns with huge market share. Each of them also commands a monopoly in their respective service areas. Each of them has tremendous lobbying power in Congress and in state legislatures. All of them are cognizant of one very big threat to their businesses: community broadband.

They are working hard to convince the Congress and the legislatures that they shouldn't have to compete with community broadband (aka, municipal broadband). They contend that private enterprise will always outperform government. Private enterprise will always provide better customer service, uptime and speeds when it comes to broadband.

But what they don't tell us is that community broadband, now available in more than 400 cities nationwide, provides 10 to 100 times the speeds offered by the incumbent providers for about the same price or less. If private enterprise is so great, why is this happening?

This is because each of the incumbents (Comcast, Time-Warner, Verizon and AT&T) have been entrusted with a monopoly franchise to operate in local jurisdictions they serve. In any city, there can only be one phone company, and/or one cable company. You can't have more than one, that just isn't practical.

So what did they do with that public trust? When Congress opened their wallet in the 1990s to provide hundreds of millions in subsidies and grants specifically for the purpose of network upgrades the incumbents laid off employees and gave bonuses. Network upgrades? Are you kidding? This is free money!

The result of this sleight of hand is that when communities wanted faster service, they could not get it from their monopoly service providers. After years of pleading with incumbents, many small towns and cities gave up and figured out ways to create their own networks, just like Chattanooga and Wilson, North Carolina.

Blindsided by this trend, the incumbents went to the state legislatures to pin down and limit community networks so that they could not expand beyond their original footprint. The message is, you will take what we have to offer, no questions, no complaints. We'll give you higher speeds just as soon as we can figure out how to finance that house on the coast of Spain for our CEO first.

Now two of the biggest community broadband cities, Chattanooga and Wilson, are petitioning the FCC to remove barriers imposed by state legislatures that prevent them from expanding their service. These community services are not only providing faster service, they are making money doing it, and doing it well. This pays dividends for their respective jurisdictions in the form of money that can be used for expansion, upgrades, and customer service. I know, pretty novel concept, huh?

Christopher Mitchell of Community Broadband Networks, notes with interest, that the courts have recently ruled that pre-empting state laws that preclude local choice in broadband providers is well within the authority of the FCC. Let's hope that Congress gets a hint that the Blackburn Amendment isn't going to pass and if you voted for it, you're going to feel the heat in the mid-terms.

In the end, we wouldn't be having this discussion if the incumbents respected the public trust of their respective franchises and honored the people who gave them the franchise in the first place. If the incumbents are replaced by community broadband, you will know why it happened.

Wednesday, July 23, 2014

When punishment becomes familiar

If you have kids, or remember what it was like to be a kid, you might find the following cycle familiar:

  1. Do something wrong.
  2. Get caught doing something wrong.
  3. Get punished: time in the corner, grounded, spanked, for some, beaten.
  4. Notice that your parents aren't around unless you do something wrong.
  5. Repeat.
  6. Escalate the punishment with every repeat of steps 1-4.
  7. As an adult, wonder what the hell happened in therapy.

Kids love attention from their parents. They need attention because by design, they are not entirely capable of taking care of themselves. As they grow older, they learn from us what life is about. They see everything adults do, especially the parents, as survival strategies. So they want to do what we do.

But if we don't give our kids enough attention, then they discover, often by accident, that the way to get attention is to get into trouble. Often, neither the parents nor the kids see this happening, for the mind cannot see outside of the problems it creates. Unless they get outside help, they may never see what is happening or understand why.

I've come to understand that if I respond to an honest mistake, an honest question, an innocent trespass by my daughter, with punishment, that will become familiar. She will think that is normal behavior. She won't understand why she is being treated that way, but she will accept it as normal and try to adapt. This is a survival strategy. She relies upon us.

So when she does something that I think is "wrong", I have to ask myself the question, "What is wrong here? What is the appropriate response?"

I don't respond with punishment. I respond with a gentle "no" and pull her away from where she was. I don't want to establish control over her. I just want to give her choices so that she can make an objective assessment of her choices without worrying about me. It is not my job to be the lesson. The lesson speaks for itself. My job is to show the way to live in peace with kindness and respect.

When parents yell at their kids, when they spank them, when they beat them (I know, I know, as a culture, I shouldn't have to include this, but there are still some people who beat their kids), that's attention. Everything we do for our kids is attention our kids are craving. Even if it is bad attention, our kids will adapt and assume it's normal.

Every form of attention has a positive feedback loop. If you punish your kids repeatedly, expect to dole out more punishments. Expect the punishments to escalate because all the kid will see is attention. The punishment becomes better than the neglect, so the kid figures how to get more by doing more irritating stuff.

Conversely, treat the kid with respect, honor and as a little human being, and you can create an opposite feedback loop. Praise the kid when they do something good, give her a high-five, and she will reciprocate. Teach the kid to read and praise the kid, and she will learn to read. If the kid makes a mistake, gently review the mistake with her and show her how to do it right until she learns or shows you a better way to do it. Kids can do that, you know? They can show you a better way to do things than before.

Either way, what you do for your kid will become familiar to him or her. She will seek out what you do in others because that is familiar. If you punish her, neglect her, or berate her, she will seek that out in a mate. If you treat her with respect, give her choices that mean something to her, and reward her for progress, she will seek that out in a mate.

If you want to bark at your kids to be quiet, when they are adults they will find mates that do the same thing. If you want your kid to obey your every command, they will do it and find a mate or even friends that command them. But if you want to have kids that think objectively about everything and everyone they meet, you may want to consider a change in course.

Trust me, it works. It's familiar. Humans crave familiarity. They crave it through school, work or to prison. They want to know that their life is predictable, reliable and safe. Yes, for some adults even prison can seem to be safer than the outside world.

So take your pick. You can choose negative reinforcement of the behaviors you desire to see in your child or positive reinforcement. Just remember that whatever you do will become familiar, a way of life for your child. This is what I think about every day that I'm with my kid.

Tuesday, July 22, 2014

The case for free software in the classroom

Many years ago, my Dad told me that when he got married, the priest who performed the ceremony said to him, "Bring 'em to us between 2 and 5 years old and we got 'em for life." In other words, bring them in early for indoctrination and they will believe in and honor the church. He never brought us in.

It appears the same strategy has been applied to our schools, but here, in an entirely different context. Since about 1997, kids have been treated to schools with a computer at the desk, and from the beginning, they were running Windows.

This must have seemed like a coup for Microsoft. First, they can ensure that kids are familiar with Windows and that since they are familiar with Windows, they will seek out Windows when they buy a computer. Businesses already running Windows will be happier knowing that kids in school are learning something that they are already using.

Microsoft has worked very hard to earn the free promotion of Windows that they receive when schools run Windows. With early exposure, Microsoft found a ready market of kids and young adults who wanted Windows on their computers.

Unfortunately, this is not what public schools should be doing. Public schools should not be in the business of picking winners and losers to be sure. But they should never be used as a platform for promoting proprietary software.

A number of schools are now finding that not only can they save money by eliminating Windows in the classroom, they are finding that it is easier to manage and maintain Linux in the classroom. As more classrooms adopt Linux, it is becoming easier to weight the costs and benefits of migration to and using Linux compared to Windows.

Removing proprietary software from schools will, if used properly, encourage kids to learn how the technology works. Allowing kids to tinker with the software running on their computers, even to make mistakes that cause problems on the computer, provide learning experiences that they can't get on a system that is locked down - the path that the Apple crowd is on. They have nice shiny technology, but they never really learn how it works. Kids on Linux will be able to see what is under the hood at any time - to make it, to break it, to get to know it.

I know from personal experience. My trip on Linux has proved to be far more interesting than any experience I have ever had on Windows. In 2007, I switched to Linux and never went back. I started with the intention of seeing how long I would last on Linux without Windows. As the operating system matured, so did I. Eventually, I reached a point where I no longer needed Windows and I shudder at the thought of ever going back. I am confident that my kids will never see Windows or iOS running in our home. They see plenty of Windows and Mac out there, but here, at home, they will have a chance to know how their computers work.

This is the difference between Windows and Linux. Windows teaches kids that you don't really need to know how your computer runs. Software comes on a CD, or as a download, and that you pay for the license to use it. Actually learning how software works seems verboten with Windows and Mac.

Linux and other open source software is the opposite. Linux encourages me to tinker with the computer, the software, and sometimes, the hardware. The source code is there for me to read and learn how it is done right. The community of Linux users is there to help me find my feet, my arms and then to eventually coordinate them while using Linux.

This trend with technology has not gone unnoticed:
"We live in a society absolutely dependent on science and technology and yet have cleverly arranged things so that almost no one understands science and technology. That's a clear prescription for disaster." -- Carl Sagan
When we allow proprietary technology into our classrooms, we must ask a simple question: "Are we promoting the ignorance of the technology we use?"

The simple answer is yes. The solution and the alternative? Linux and open source software.

Monday, July 21, 2014

A thought experiment: The case for drug tests for business licenses

I'm writing this article as a thought experiment. I will start by saying that I am totally against the war on drugs and I see the current regime of severe punishment for mere possession of drugs counterproductive. The harsh sentencing guidelines that judges have to deal with provide no latitude for treatment over prison and seem almost uniquely designed to keep our prisons full.

The evolution of the war on drugs has led to drug testing in the workplace, a practice that is now common and even traditional for large firms. Government agencies routinely test for drugs for their employees. But they don't seem to test for drugs for most benefit programs, you know, like the TARP program, a part of the bailout plan for the big banks after the collapse of the housing bubble. What I offer for consideration in this article is drug testing for a business license. The regime is as follows: all persons named on the license must submit to an annual drug screen to make sure that they are free of drugs. If they fail the test, they lose the business license.

This does in a way, make sense to me. Businesses put their private property up for hire. The owners hire and fire employees. The owners create a dependence upon them for their services and infrastructure. I, for one, would like to know that I'm not enabling someone's drug habit, especially someone at the top.

The business is dependent upon the decision making skills of the employer, the owner. The people who depend upon the business need to know if their money is going to finance, either directly or indirectly, the sale or purchase of illegal drugs. Wouldn't you like to know if you're working for a ration employer who is free of drugs? I sure would.

Would you do business with a company where you knew the CEO was using pot, cocaine or barbiturates? Would you feel comfortable knowing that ultimately, any dispute with a front line employee could ultimately be decided by an owner who has a habit?

I favor treatment over prison in cases of drug use and possession. But I do think that as a citizen, I would like to see drug testing for business licenses. This might go a long way to cutting demand because a business owner who has time, might think he has the time to drift off.

Even as a thought experiment, it's hard to see all of the ramifications of instituting such measures. Humans are very creative and when they really want something, they will find a way to get it. That's just how we are and that is why the drug war won't work and never will. Even my idea here for testing for drugs for business licenses probably won't work when put to the test.

How many businesses would fold because of test failures? How many jobs would be lost? We don't know. Without drug testing for business licenses, we would never know for sure. The only thing we can be sure of is that if we don't like the service we're getting, we can go somewhere else with our money.

Thursday, July 17, 2014

Marsha Blackburn must be pining away for a job at Comcast

I see in the news that Rep. Marsha Blackburn is going to offer an amendment that would prevent funding of any effort by the FCC to preempt state laws that limit or prohibit municipal broadband adoption and/or expansion. I guess the the dark side of the Force got to her before common sense did. You know, Comcast. Verizon. AT&T. Yeah, those guys.

Here is what is happening. Over the last decade or so, cable and phone companies figured out that there is the possibility that cities and small towns could do an end run to get faster speeds at reasonable prices for internet access. More than 400 such places have done exactly that, causing some bruised egos and bleeding in the bottom line.

Why build better infrastructure for your customers to deal with competition when you can beat them into submission at the state legislature? That's what Marsha Blackburn's amendment is all about. It's about removing local choice from cities and towns for internet access.

The Coalition for Local Internet Choice, with Vint Cerf on the board of directors, has also taken notice and has urged a "NO" vote on this amendment.

If you want to see the end of the cable/telco duopoly on internet access, pick up the phone and call your representative in the House and provide them with an undiluted portion of your opinion and urge them to vote NO on the Blackburn Amendment.

Wednesday, July 16, 2014

Mind to mouth

I have a daughter of 19 months. She's learning to talk and as I watch her try every day to say words that we can understand, I have noticed that she's speaking in sentences, too. Just not sentences we understand. Whatever she is saying is only known to her.

I know she knows words because she responds appropriately to what I say. She moves and acts in ways that are consistent with what I ask her to do. I'll say, "Go give that to mommy," and she will do just that. So I know she understands what I'm saying.

If she understands what I'm saying, and she understands what she is saying, then she doesn't seem aware that we don't understand what she is saying most of the time. I can hear her say parts of words, but not all of the word she is trying to say. She probably hears the words in her head and understands the meaning of what she wants to say, but she doesn't have full motor control of her mouth to form each sound yet. I wonder if she knows that this is happening. Probably not.

The following video shows my daughter having a conversation with me. Have a look.

As you can see from the video, she can wax eloquent while speaking what sounds like gibberish to us. She seems fully aware of what she wants to say in her own mind, but doesn't know that what is saying is unintelligible to me. Notice that she knows where Mommy is and where the snow is.

As she grows older, she will learn to form the words and all of us will marvel at the first time she can say something that all of us can understand. At that point, she will use words more and more to get her needs met rather than gestures and just sounds.

I offer this example not just to show Emily's development. I offer this also to make a point. Some people never grow out of this phase, but with a twist. Some people can say what they understand, but will be completely unaware that other people don't understand what they are saying. There is a break down in communication from within the brain where there is know acknowlegment.

To put it differently, what I am saying in a conversation requires context to be understood. No one can get inside my head to understand the context of what I'm saying, just like I can't know the context of what Emily is saying because her worldview is so completely different than mine.

This is a problem on many levels, from personal to geopolitical. I've seen this while observing the discord between the two dominant parties, the Democrats and Republicans. When Democrats try to talk to Republicans, the Republicans are listening to what is said in an entirely different context than what the Democrats are thinking. The reverse is true, also.

It is not easy to take communication in context. I have this problem and I'm a pretty active listener. Active listening is the mental task of asking questions without saying them, while listening to what is being said. As someone who is hard of hearing, I try to take in everything, body language, tone, pitch, rhythm - any clues I can find to understand what people are saying. I use that information to establish context.

When we're dealing with an adversary, we may be more concerned with getting what we want than actually listening. This can impair our ability to negotiate because we can't understand what others are saying in the context of what they want, what they see as right. We hope that a 3rd party can act as arbitrator so that we can be sure what we're saying is properly understood by the adversary in context.

I know this from my own experience. I've written letters and said things to other people, that later, when I asked them about it, they said they didn't understand what I was saying. Upon hearing that, I found myself bemused and a little bit confused. I thought they understood, and had that sense about me for weeks, even months only to find out that the other person had no clue what I was talking about.

This lack of understanding can be innocent or intentional. Sometimes, people can choose to say, "La la la, I can't hear you!" Other times, we think we understood what was said to us, when we didn't.

Person to person, nation to nation, we find that communication, in all of its forms, is the foundation for peace. We can't just say what we want to say, we need to get acknowledgement that what we said was understood. We might ask, "What was the middle part again?"