Paul Krugman: The French Connections

Paul Krugman discusses how lack of competition among providers of high-speed internet service has caused the U.S. to fall behind other countries:

The French Connections, by Paul Krugman, Commentary, NY Times: There was a time when everyone thought that the Europeans and the Japanese were better at business than we were. In the early 1990s airport bookstores were full of volumes ... promising to teach you the secrets of Japanese business success. Lester Thurow’s 1992 book, “Head to Head: The Coming Economic Battle Among Japan, Europe and America,” which spent more than six months on the Times best-seller list, predicted that Europe would win.

Then it all changed, and American despondency turned into triumphalism. Partly this was because the Clinton boom contrasted so sharply with Europe’s slow growth and Japan’s decade-long slump. Above all, however, our new confidence reflected the rise of the Internet. ...[M]ost of Europe except Scandinavia lagged far behind the U.S. when it came to getting online.

What most Americans probably don’t know is that ... as dial-up has given way to ... high-speed links — it’s the United States that has fallen behind.

The numbers are startling. As recently as 2001, the percentage of the population with high-speed access in Japan and Germany was only half that in the United States. In France it was less than a quarter. By the end of 2006, however, all three countries had more broadband subscribers per 100 people than we did.

Even more striking is the fact that our “high speed” connections are painfully slow by other countries’ standards. ... Oh, and access is much cheaper...

What happened to America’s Internet lead? Bad policy. Specifically, the United States ... forgot — or was persuaded by special interests to ignore — ...that sometimes you can’t have effective market competition without effective regulation.

You see, ... to get [to the internet] you need to go through a narrow passageway, down your phone line or down your TV cable. And if the companies controlling these passageways can behave like the robber barons of yore, levying whatever tolls they like on those who pass by, commerce suffers.

America’s Internet flourished in the dial-up era because federal regulators ... forced local phone companies to act as common carriers, allowing competing service providers to use their lines. Clinton administration officials ... tried to ensure that this open competition would continue — but the telecommunications giants sabotaged their efforts, while The Wall Street Journal’s editorial page ridiculed them as people with the minds of French bureaucrats.

And when the Bush administration put Michael Powell in charge of the F.C.C., the digital robber barons were basically set free to do whatever they liked. As a result, there’s little competition in U.S. broadband — if you’re lucky, you have a choice between ... the local cable monopoly and the local phone monopoly. The price is high and the service is poor, but there’s nowhere else to go.

Meanwhile, as ... Business Week explains, the real French bureaucrats used judicious regulation to promote competition. As a result, French consumers get to choose from a variety of service providers who offer reasonably priced Internet access that’s much faster than anything I can get, and comes with free voice calls, TV and Wi-Fi.

It’s too early to say how much harm the broadband lag will do to the U.S. economy as a whole. But it’s interesting to learn that health care isn’t the only area in which the French, who can take a pragmatic approach because they aren’t prisoners of free-market ideology, simply do things better.

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Previous (7/20) column: Paul Krugman: All the President’s Enablers
Next (7/27) column: Paul Krugman: The Sum of Some Fears

Update: Paul Krugman emails:

I wrote a piece on this, "Digital Robber Barons?", back in 2002 - unfortunately, it looks my worries were justified. Also, Matthew Yglesias had a piece 2 years ago (which I somehow missed).

The broadband penetration statistics are at http://www.oecd.org/document/7/0,3343,en
_2649_34223_38446855_1_1_1_1,00.html

Connection speeds are at http://www.websiteoptimization.com/bw/0705/

 And he adds his personal experience:

When Robin and I moved into our current house, which is in Princeton Township a few minutes' drive from the university, we had NO broadband available. We actually got a satellite dish - which provided lousy access, but better than dialup. Eventually Verizon offered DSL - pretty slow DSL. And last year Patriot Media, our cable monopoly, finally came up with its own offering. But that's it. 

Comments

[Objectivist]

US vs. France

Who wins on health care? France.
Who wins on child care? France.
Who wins on Nuclear Power Plants? France.
Who wins on Internet Connections? France.
Who has higher productivity? France.
Who has longer vacations? France.

I think I am starting to see a pattern.

[dissent]

I think 'free market ideology' is a misnomer. We should call it 'kiss rich butt ideology'. That is the 'value' the conservatives have shoved down our throats.

[Bruce Wilder]

The economics of internet connectivity are actually very clear. Greenfield systems of broadband service are pretty cheap and getting cheaper, very rapidly. Existing copper POTS (plain old telephone service) and coax Cable television is very nearly worthless -- and worth considerably less than the debt associated with it. The sensible thing to do would be to let AT&T and Verizon and Time-Warner and Comcast go bankrupt, in a frenzy of creative destruction, while freeing municipalities and other local government entities to build their own systems, bandwidth on which can be leased to content providers, under terms ensuring net neutrality.

Of course, the U.S. will not do anything sensible in my remaining lifetime, if ever. I suppose we should be thankful that AT&T doesn't need us to invade Poland. Yet.

[Cyrille]

The vast majority of broadband access in France comes through the copper line that used to be POTS you know.

In fact, the older the line, the better the bandwidth because the copper was purer. If you visit the tunnels beneath Paris you see some obviously really old stuff, and they explain to you how this is dedicated for ADSL now ;-)

[esb]

Mark Thoma...

I notice that Eugene is one of the Clearwire cities. I am interested in knowing (to the extent that you and your immediate associates are aware) how effective the system is there. Is the entire city effectively 'blanketed'? Any serious problems? Complaints?

I am more than a litle confused that the entire country has not been brought under some version of the WIMAX umbrella.

Best regards.

[Alex Tolley]

As if the duopoly wasn't bad enough, Verizon is trying to make it a monopoly by destroying the copper cables to your home when you get their FIOS high speed internet. In other words, once you have FIOS, you cannot go back to the old POTS.

http://news.yahoo.com/s/ap/20070708/ap_on_bi_ge/verizon_cutting_copper_1

And of course net neutrality is out of the window because these carriers say they won't build infrastructure without total control of the pipes. What a laugh.

[Lafayette]

PK: ... to get [to the internet] you need to go through a narrow passageway, down your phone line or down your TV cable. And if the companies controlling these passageways can behave like the robber barons of yore, levying whatever tolls they like on those who pass by, commerce suffers.

The “French Connection” is not so different from the “American Connection”, at least as telecommunications is concerned. America created a patchwork from the incumbent operator (Bell Telco) that it deregulated. France simply “liberalized” connection to France Telecom switches, and the latter kept ownership of the copper pathways to the house when it was privatized (constituting the major element to its capital base valuation). (The other copper pathway to the house, electricity is late to the game, but once it gets its technology right – getting the signal to pass through electrical transformers without qualitative loss – it could become a major competitor.)

The major challenge with telephony DSL is getting a device called a DSLAM (DSL Access Module) into and connected to the local exchange. Planners (meaning the federal government in the US and the state in France) needed to understand who would finance this tremendous outlay and how. To my mind, the French state should have created a semi-private organization that ran the telecom lines (already in place and amortized ) and then set a connection fee (bandwidth related) to all comers including France Telecom. But, they decided not to do this to sooth union opposition. France Telecom was featherbedded state entity.

The array of offering today is very acceptable, but only because the French state regulator (ART) makes sure that the base service fees are low enough for everyone to compete. The FCC could just as easily do the same, but it does not have the political will to do so. And we all know why - which is the fundamental difference between the French and American access tariffing schemes. (Just ask Colin Powell's son, who refused to militate against the high cost permitted of local incumbent suppliers of line access to would-be resellers.)

Krugman is right about line access, but in fact the best in the world are the South Koreans who have a highly penetrated customer base. As well, there are two metrics, one is ‘penetration’ (how many users are connected via DSL) and the other is “occupation” (how many actually use it to transact business/commerce). The US is behind in the former metric but still ahead in the latter. (Rural penetration is far greater in France than in the US, because the French state mandated that the incumbent had to install DSLAMs in rural communities to exploit the monopoly privilege of reselling connectivity to resellers.)

Also, there is the little know fact that WiMax DSL, which is the inevitable solution of choice in terms of wide area delivery of Web interconnect is far more developed in the US than in France. Getting to the major market population in the cities was relatively easy. Getting to the larger population in suburban and rural communities is quite different. Both America and France share the same geographic qualification, large land mass.

Krugman is essentially right, however. The French understood how to regulate the cash-cow but let it survive as a private enterprise. It has done the same with high-speed train transportation, which is changing rapidly country demographics and where the US is light-years behind.

As for the two other “Public Services”, Health Care and post-secondary school Education/Training, there is a fundamental dichotomy in philosophy between the two countries in the manner in which they should be provided to the most at the least expensive price.

But, that is another subject for another day.

[Lafayette]

There is another "French Connection" that is interesting to note. It is in mobile telephony.

France, as a leading player in developing the GSM telephony standard, was a member of the EU country consortium that was given the franchise to implement and develop GSM mobile telephony throughout Europe. (Yup, no competition on carrier technology, but multiple competition -- minimum of three operators -- for service providers.) One could make a mobile phone call from Greenland to Greece seamlessly ( but at an exorbitantly high price).

America, once again genuflecting at the altar of "free market silliness", decided to allow differing communication technologies compete (real-time) on the principle that to victor go the spoils (meaning market predominance "ala Microsoft"). The result was a hodgepodge of local mobile operators and the rather stupid consequence -- at one time -- of being unable to call from, say, New York to San Francisco.

The FCC could just as easily have had a run-off (like the DoD does) amongst competing mobile network designs to finally choose the best. (Which, btw, is probably not the European GSM, but CDMA.) It could have then created a semi-private company that was funded by the FCC to implement the network and then lease line access to all comers. But, no. The Mini-Bells didn't want to give up their regional monopoly cash-cows, did they.)

All the above is rather moot. Because the apparent best way to implement "3G" (third generation) mobile telephony is quite possibly over WiMax, which is on the horizon but still a bit of a way off in the future.

Will the FCC get it right this time? No way, José. The FCC will once again genuflect at the altar of "free markets" ... and the customer be damned.

Look, Europe is getting rid of its state monopolies, largely feather-bedded by the unions since WW2, to denationalize public services (telephony, gas, electricity, telecoms, trains, etc.) In a similar vein, however, the US creates regional monopolies for private enterprises to bilk the public with high prices. Who is better off? The customer or the (stock-option) share holder? One guess.

What does all this discussion about private enterprise versus public service indicate. Obviously, that Europe knows how to understand some services that are qualified as truly public (and implement them with an effective state supervisory control). Whilst the US, in the name of an ideology such as "smaller government efficiency", allows private enterprise market monopolies -- to the benefit of shareholders and the disservice of the general public. (And then goes off and wastes billions in a useless foreign war.)

I am really and truly a private enterprise enthusiast. But, hey, there are markets (called public services) where it simply does not apply unconditionally. America has become fixated by a "free market" ideology that is sometimes absurd. When applied as policy, it is tantamount to economic fundamentalism.

[Solomon Grundy]

Hi, I live in Britain, and just to support Mr. K's point: I pay less than $50 a month for my telephone landline service, AND Broadband. 8 mgb broadband is included, as are calls to the USA and 30 other countries. I've never exceeded my limit on free in-country calls, so I only ever pay the minimum. I can choose from, I don't know, maybe a dozen or more broadband suppliers.
My mobile phone, which includes camera, video, internet connections, cost me nothing, and my monthly bill is about $40 or so. I get loads of free calls, and it won't cost me more unless I use it to browse on the Internet extensively. It's very easy to get a free mobile phone here, and I didn't even have to trade in my old phone, so I sold it.

[Mark Thoma]

On the ClearWire question, haven't used it, but have had this page saved for later reference - not much, but all I know:

http://www.registerguard.com/news/2007/06/05/c2.cr.wireless.0605.p1.php?section=cityregion

[Lafayette]

OB: Who has higher productivity? France. Who has longer vacations? France.

These two above are incompatible.

As a consultant, I have represented American companies looking for greenfield (startup) sites in Europe. After I parade them around the various statistics, including total manpower costs, they inevitably -- with a sigh -- leave France behind and go to where everybody else goes ... Ireland, the UK or perhaps Holland. (Language may be playing a role in their decision, but I don't see all that many Far East companies seeking avidly to set up sizeable business activities in France - a lab here, a small office there. Toyota is an exception with a new plant, but most are heading for Slovakia or other points east for heavy manufacturing.)

And yet, France has a very good level of FDI, so one must ask "where IS the money going?" I suspect commercial real estate - Europe is THE crossroads of Europe, and for trans-shipping it is a must place to have warehousing/storage/transportation facilities.

I have availed myself of Health Care services in France and the US. France is no doubt better, in professionalism (it's equal), access (it's better) and cost (it's the tops). From my working with French companies, however, I cannot believe that they are more productive. And, I can give mountains of evidence that foreigners -- even at higher prices -- prefer to do business with Switzerland and Germany. The quality is excellent and their delivery is on-time.

Yes, I like statistics, just like most of us on this forum. I like better, however, when those statistics are conditioned with empirical, "hands on" evidence.

Your opinion is welcome.

[Lafayette]

SG: I live in Britain, and just to support Mr. K's point:

Do you know who installs the DSLAMs in the UK? Is it British Telecom (BT)? Who owns the copper lines to the house? BT?

Who regulates the resale of those lines? Not BT, I should think. (Besides, for the same service, France is at 30€ or $42. And the telephone quality is the pits, since it employs Internet TCP/IP between local exchanges.)

[arbogast]

I pay 39€ per month for unlimited calling in France and unlimited calls to the US. I pay 19.95€ per month for basic television and 30Meg Internet access to a cable company.

That's about $82 per month for very high speed Internet access, telephone, and television.

It's too much. It can be done cheaper here, but not with the unlimited calls to the US as well as, perhaps, some other features.

What is the cost in the US of unlimited calling to Europe?

[Brenda Rosser]

" Who wins on Nuclear Power Plants? France.."

Noone wins with nuclear power plants.

16 Million Radiation Deaths and Counting
http://www.ratical.org/radiation/inetSeries/RB89.html

[Frans De Keyser, Brussels]

Most of the de-regulation and the new regulation came from Europe. France was one of the last countries to give up their monopoly.

[Lafayette]

FDK: France was one of the last countries to give up their monopoly.

"Giving up a monopoly" typically means sizeable reductions in personnel.

The "monopolies" had known, for quite a while, that they would have to comply by reducing people gradually - rather than just chucking everybody out the window and creating considerable social upheaval. It's the way things are done in Mediterranean countries where there is no great rush ... of the cliff.

Which is why one hears, all too often in France, American enterprise called "savage capitalism". The appellation is not all right. It's not all wrong either.

The truth is somewhere in between.

[Lafayette]

BR: No one wins with nuclear power plants.

Balderdash.

Next time you turn on your light, ask what viable alternative there is to nuclear. Oil-fired generators that pollute the air and keep us dependent on Middle-east oil and Russian gas?

[Mark Thoma]

[I had this as an update, but took it down since I thought it distracted from the column and I wasn't sure it would be of much interest. But for what it's worth, here it is.]

Update: Here is a bit more on competition in local phone service markets. This is a description of the part of the Telecommunications Act of 1996 that requires Incumbent Local Exchange Carriers (the dominant local phone company as determined by the FCC, e.g. Southern Bell, QWest, Pacific Bell, Verizon, etc.) to allow competitors access to their equipment. That is, the dominant local carrier must allow competitors full access to switches at the wirecenter (switches are used to route calls), its copper wire loops (phone lines from switching centers through local neighborhoods), its fiber, new entrants can even access billing software. (The term used for the entrants is CLECs, or Competitive Local Exchange Carriers - it's actually a bit more complicated than this as there are also Resellers and other categories, but CLECs are the biggest part of the competitive fringe).

Thus, there are two ways to enter a market. One is "facilities based," but due to high fixed costs and other problems, entry through this route is difficult (e.g. laying your own cable or fiber lines, launching a satellite, constructing a cell network). The other is "non-facilities based" and that is where Unbundled Network Elements (UNEs) come in. This allows a firm to enter a market and undercut existing carriers with no equipment at all, they are allowed to essentially set up in the same building and plug into the ILECs existing network.

There are a lot more details, one is that rates are set by state Public Utilities Commissions, and rates are always an issue. They are supposed to represent incremental costs, but those are difficult to calculate for a variety of reasons so it comes down to a battle of consultants with the PUC. Generally, as you would expect, ILECs claim they are subsidizing competitors because the rates are too low, and CLECs claim the rates they pay to use the network elements are too high making it difficult for them to compete successfully.

My understanding is that there was a period of time when unbundling worked fairly well at promoting competition in local service markets. I haven't kept up (so please add details or corrections if you can), but it sounds like it has become more difficult for CLECs to enter markets and survive, and as noted in Paul Krugman's column, it also appears that competition in internet service markets is not very robust once you get beyond local, dial-up service providers. As far as high-speed internet connectivity is concerned, perhaps some sort of UNE type arrangement is needed to promote competition, i.e. a way for potential competitors to easily access existing networks. The providers generally invoke the potential for intra-modal competition (e.g. satellite versus cable) to claim that competition already exists and avoid opening up their networks, but the results in the marketplace are evident with the high price and poor service described in the column.

Here's a description from Newton's Telecom Dictionary, an authoritative reference text in telecom work:

UNE (pronounced you-nee). Unbundled Network Element. The Telecommunications Act of 1996 requires that the ILECs (Incumbent Local Exchange Carriers) unbundle their NEs (Network Elements), which must be made available to the CLECs (Competitive LECs) on the basis of incremental cost. This means that CLECs will pay the addition costs the ILECs incur in making these facilities available. The words "incremental cost" are meant to signal to the ILECs that they are not to inflate the price of these facilities by adding overhead costs (e.g. the salary of the ILEC's people in charge of investor relations). UNEs are defined as physical and functional elements of the network, e.g., NlDs (Network Interface Devices), local loops, switch ports, and dedicated and common transport facilities. When combined into a complete set in order to provide an end-to-end circuit, the UNEs constitute a UNE-P. (UNE-Platform). Unbundled Network Elements is a term used in negotiations between a CLEC (Competitive Local Exchange Carrier) and the ILEC (Incumbent Local Exchange Carrier) to describe the various network components that will be used or leased by the CLEC from the ILEC. These components include such things as the actual copper wire to the customers, fiber strands, and local switching. The CLEC will lease these UNEs with pricing based on the previously-signed Interconnection Agreement between the CLEC and the ILEC. Typically, a CLEC will colocate a switch at the ILEC's wirecenter, then pay for the "unbundled" local loop to make a connection to the customer. Alternately, a CLEC might lease both an unbundled local loop and an unbundled switch, and make a connection to their network at the LEC's switch. See CLEC, ILEC, the Telecommunications Act of 1996, UNE Rate, and UNE-P.

[anne]

Lately, I have been asking after public library Internet access and have been surprised and saddened at how poor the access is. I should not have been so surprised because public libraries are too often lacking in public support. (Oregon has been portrayed as failing to support public libraries, but I find the same in Massachusetts, Rhode Island, Connecticut and New York.) Beyond limited library days and hours, libraries bordering schools, computer use is severely limited from 15 minutes to an hour with only counter standing use use possible. Not only is wireless access so often lacking, but even use of electrical outlets may not be allowed.

[anne]

Infrastructure? Why worry about infrastructure when we can always fight a war and occupy another country; which other country by the way is evidently not even spending its oil revenue on its own infrastructure? Why worry about infrastructure when such a worry could even be a significant help to American workers, sort of like, well, in the New Deal (shudder)? Why worry about American competitiveness, after all, from general health care and minimal tuition at public colleges and universities, to green infrastructure including Internet facility development?

[save_the_rustbelt]

Huh.

I'm sitting in a nowhere small town in the middle of Michigan using a high speed connection that is readily available to anyone who needs it.

Down the street are public and college libraries with high speed connections (T-1 I think).

My hosts tell me they have access to at least 3 broadband companies and that many of the farmers have sattelite access. Wireless hot spots are all over town. And this place has more deer than people.

I can't think of any of my consulting clients anywhere who do not have reasonable access to service.

Some of my relatives in rural Oklahoma do have access problems, but can also buy a dish if so desired. Most of them take theirs steers to market based on Internet reports of prices, and they track weather from the computer.

I'm wary of economist/columnists with agendas.

[anne]

Which is precisely why the rustbelt needs no saving, ever never, all that marvelous Internet connectivity. Always find another bizarre reason to bash and smash Paul Krugman.

[Alex Tolley]

I have been asking after public library Internet access and have been surprised and saddened at how poor the access is.

I'm happy to say that my local libraries in the south of Silicon Valley offer wireless access and power sockets. This is really a no-brainer for an institution that is trying to find renewed relevance in the c21st.

[ken melvin]

Let the market do it. Let god do it. Let godot do it.

[Alex Tolley]

My understanding is that there was a period of time when unbundling worked fairly well at promoting competition in local service markets. I haven't kept up (so please add details or corrections if you can), but it sounds like it has become more difficult for CLECs to enter markets and survive.

As was easy to surmise, the RBOCs just put up endless, bullshit barriers to stifle use of their lines and make it hard for the CLECs to survive. This behavior was seen before in a different times and contexts. I well recall when Britain allowed anyone to make telephone handsets that BT, which still retained the power to certify, would drag their feet to make this very hard. Whatever the competitive element, the telcos' mantra is always the same "we must protect the quality of the service".

[Alex Tolley]

One reason the internet has been so successful is the use of common standards. TCP/IP stacks, HTPP, FTP protocols etc. Even Microsoft pretty much abandoned its own networking protocols that competed for a while due to their near platform monopoly. Today, they still try to usurp rules, e,g, Explorer's non-standard rendering of HTML and application of CSS.

US cellular companies are still playing that game. Cellphones should all be using a common communication standard and freely interchangeable. The current attempts to crack the iPhone to make it work with other carriers should be viewed for what it is - that it is a disgrace that the physical devices are locked to the carrier's service.

Telcos love their [un]natural monopoly. Witness the telco lawsuits to prevent municipalities offering their own low cost, internet access, especially wireless. "Robber barons" is the best term to describe this behavior.

[Octavian]

I am not convinced that our national situation is dire. Each member of my family has a great internet connection at work or school. Plus we have DSL at home, which though not great, is good enough for the email and surfing that we use it for. Thus one household has 5 internet connections for 4 persons. Those institutional accounts are not caught in the OECD data that Krugman is using for his comparisons.

A less well known story that better illustrates the monopoly power of the phone companies are the high prices they charge for access to commercial buildings---so called special access. Very high prices and rates of return. These high prices make back office operations more expensive, etc.

Not as popular a cause as residential broadband, but more important economically I think.

[save_the_rustbelt]

Anne; do drop in when you have something useful to say.

Did a quick check over a coffee klatsch, in a non-scientific survey most have home broadband, and several spend more for premium tv channels and satelite radio than they do for broadband. Most are quite happy.

Perhaps consumer preferences in the market have something to do with this?

[Frans De Keyser, Brussels]

Lafayette, Marc Thoma,

Very interesting discussion, but my point is that the de- and re-regulation started with the European telecom-directives called "Open Network Provision" of 1990. Important is not only France but the interaction between the European commission and all the member-states. The evolution in Germany, Italy, Spain and not to forget a small country like Belgium, is as interesting as what happened in France, I would say, even more. Note also that through those directives, every member state has a regulation authority that supervises the fair competition on all aspects on the telecom-market.
My reaction is also inspired by the fact that the future of the European telecom is also slipping into the “ reemphasizing on the role of national states” –tendency, you can find all over Europe (see last summit).
The website of the French authority ARCEP refers e.d. only to a French law as the base of his creation, and refers to the revision of the ONP-directives of 2002, without mentioning the word Europe.

[Ken]

In my neck of the woods in Michigan (Oakland County) wireless internet access is free. Its not the quickest in the world by free is nice. you can get 520 up and down for 19.95 per month.

What I found really strange is that this county is red as hell.

[anne]

When last we were bashing and smashing Paul Krugman, Paul Krugman was suggesting that there were some few Americans who might like to have, well, health care insurance. I, however, took a non-scientific survey and found that the non-scientific folks I surveyed are too well to care about care. No problem.

[worker]

"I haven't kept up (so please add details or corrections if you can), but it sounds like it has become more difficult for CLECs to enter markets and survive."

Under the TCOM act, every 3 years the FCC was charged (the triennial review process) with reevaluating which network elements were subject to "competition" and could be removed (ie. remonopolized).

The 2003 triennial review decision, which was litigated into 2005 proved the death knell to the industry. Although one can say that Powell, Martin, other Repub FCC directors did the RBOC's bidding, the DC court of Appeals was the real villain in their errant application of Verizon's version of free market principles. The FCC was then creating rules around the DC court of appeals rulings that required the FCC to consider whether theoretical competition might be possible without access to the legacy network elements (in which case the FCC could not order access to them). It was an opening big enough that the RBOC's economists, lawyers, lobbyists could argue that they had potential competition at each point throughout their network.

By the way, the cost of fighting this single preceeding (the TRO) was in excess of $100mm on all sices. Shortly after this (and resulting from this) decision was finalized in 2005, MCI & ATT were sold to RBOC's. Since AT&T and MCI were the only carriers who could fund the battle against the RBOC's, the rest of the competitive industry has withered away. Meanwhile, state level proceedings to determine the network element cost under the TELRIC model were reopened at the RBOC's request. So while eliminating many of the "network elements" competitors relied on in the 2003-2005 TRO, state level proceedings simultaneously threatened to raise prices, often in excess of 100%. In case that wasn't enough a number of other RBOC regulatory initiatives were lurking in the background, creating sufficient "regulatory uncertainty" to deter investment in competitors.

The telecom act of 1996 was naive in trying to tame the RBOC's through regulation. Although the FCC is generally a highly professional, competent and innovative regulator, it is subject to political whim and corporate pressure like any other. Also, devising a theoretically perfect set of rules does not ensure that they will be followed, especially when those rules amount to 100,000's pages subject to interpretation.

Only structural seperation (divestiture) of the legacy network elements from the rest of the RBOC operations could eliminate the incentive by former monopolists to leverage these monopoly assets, built over 100 years on the back of the ratepayer (ie. consumer). But with this incentive left in place, the RBOC's had the tools (including ultimately capturing the regulator) to sabotage any competitors business model that relied on interconnecting with "their" network.

As a side, although the RBOC's are generally anti-competitive villains, I think they are right in the current "net neutrality" debate, as it is currently framed.

[anne]

http://www.nytimes.com/2007/01/03/opinion/03wed1.html?ex=1325480400&en=0c3c4bcf254c5939&ei=5090&partner=rssuserland&emc=rss

January 3, 2007

Protecting Internet Democracy

One of the big winners in the last election may turn out to be the principle, known as net neutrality, that Internet service providers should not be able to favor some content over others. Democrats who are moving into the majority in Congress — led by Ron Wyden in the Senate and Edward Markey in the House — say they plan to fight hard to pass a net neutrality bill, and we hope that they do. It is vital to preserve the Internet's role in promoting entrepreneurship and free expression.

Internet users now get access to any Web site on an equal basis. Foreign and domestic sites, big corporate home pages and little-guy blogs all show up on a user's screen in the same way when their addresses are typed into a browser. Anyone who puts up a Web page can broadcast it to the world.

Cable and telephone companies are talking, however, about creating a two-tiered Internet with a fast lane and a slow lane. Companies that pay hefty fees would have their Web pages delivered to Internet users in the current speedy fashion. Companies and individuals that do not would be relegated to the slow lane.

Creating these sorts of tiers would destroy the democratic quality of the Internet. Big, wealthy voices would start to overpower the smaller, poorer ones. Innovation would be threatened if start-ups and small companies could not afford the new fees. The next eBay or Google might never be born.

A net neutrality law would require cable and telephone companies to continue to provide Web sites to Internet users on an equal basis. Mr. Markey, of Massachusetts, will be taking over a key subcommittee that handles Internet issues. He has promised to hold hearings to educate Congress and the public, and to reintroduce his strong net neutrality bill. Mr. Wyden, of Oregon, plans to reintroduce an equally solid bill in the Senate.

Passing the legislation will not be easy. The cable and telephone companies have fought net neutrality with a lavishly financed and misleading lobbying campaign, because they stand to gain an enormous windfall....

[anne]

Regional telephone companies have been continually lobbying to emphasize their economic power by ending Internet neutrality, while such an end could not be more threatening to Internet democracy. Fortunately, a Democratic Congress should be just able to prevent an end to Internet neutrality.

[Peter Schaeffer]

I hate to rain on anyone's parade. But population density has much to do with this. The US is less densely populated and that impacts telecom. Korea is perfect for broadband because most folks live in apartment buildings in large cities. The same cannot be said for the US. A quote from Wired should make this clear

"The Bandwidth Capital of the World"
http://www.wired.com/wired/archive/10.08/korea.html

“When it comes to rolling out bandwidth, South Korea's population density is an advantage. Seventy percent of its citizens live in the seven largest cities, in residential towers nestled close to DSL switching stations. The capital city of Seoul itself accounts for a quarter of the population. To put this in perspective, consider that South Korea's national communications backbone consists of 13,670 miles of optical fiber. Last year, Verizon laid down 20,500 miles of optical fiber in West Virginia alone. This fact doesn't make the Korean information infrastructure any less impressive. But the country does have an easier job on its hands than say, Indonesia, or the Philippines, or Mexico.”

And

“As luck would have it, urban apartment dwellers have a lot of broadband capacity right under their noses, courtesy of Kepco, the public power utility, which developed a network of fiber-optic cables for its own use years ago. In 1996, South Korea allowed Kepco to lease the unused 90 percent of its capacity, giving upstart providers a cheap, instant last-mile solution. Sharp competition with Korea Telecom, which the government forced to open its network in the early '90s, has driven broadband prices down to the world's lowest levels. All-you-can-eat service is available for as little as $25 a month.”

Without systematic adjustment for the physical differences between the US, France, and Korea it is hard to say how well the US is doing.

[Fan]

Down the street are public and college libraries with high speed connections (T-1 I think).

I saw repeated references to "high speed access" in this thread. Earth to space. In the 80s T-1s were high speed (in the 70s that description was applied to 56k lines). Today a Korean has access to 25 times T-1 speed to the home at an affordable price.

[save_the_rustbelt]

Fan:

Other than downloading movies I can't think of any home or small business operation that would require such extreme high speed.

Could much of the world be paying for capacity they don't need? Like a car that needs 4 cylinders but has 8?

At home I do a great deal of sophisticated business work and rarely have problems with cable broadband.

Peter:

If you use facts and logic here you may disturb some of the regulars :))

[Alex Tolley]

Anne: That article is out of date. Net neutrality continues to be undermined:

http://arstechnica.com/news.ars/post/20070627-ftc-shoots-down-net-neutrality-says-it-is-not-needed.html

The telecoms have a great record in buying the votes they need to maintain control. The telecoms have been quite successful in framing the argument that net neutrality is about new regulations on the internet hindering buildout of infrastructure, whilst concealing the intention to be able to charge extra fees for service delivery access and priority.

[anne]

Alex Tolley:

"The telecoms have a great record in buying the votes they need to maintain control. The telecoms have been quite successful in framing the argument that net neutrality is about new regulations on the internet hindering buildout of infrastructure, whilst concealing the intention to be able to charge extra fees for service delivery access and priority."

Thank you for the several comments, and I will from here pay closer attention to the net neutrality issue.

Fan:

"Today a Korean has access to 25 times T-1 speed to the home at an affordable price."

Adding to the fine comment on Korean Internet speeds, I was startled 3 years ago at the speed and resultant simplicity of I could do on the Internet in Norway and Sweden, speed and simplicity that I do not have yet that I through our university line let alone at home.

[Alex Tolley]

Other than downloading movies I can't think of any home or small business operation that would require such extreme high speed.

Could much of the world be paying for capacity they don't need? Like a car that needs 4 cylinders but has 8?

At home I do a great deal of sophisticated business work and rarely have problems with cable broadband.

Funny thing about computer CPU speeds, memory, HDD space, communication bandwidth. Everytime there is someone who cannot imagine every using the capacity they have...and then someone comes up for a use for it. Bandwidth - streaming video for "video on demand", not just YouTube? Think the carriers might want to be get a piece of that pie? There was a recent story on reddit, I don't know how true, about a swedish woman who had just been hooked up to a really nice high speed network. Enough bandwidth to download a DVD (4.5-9.0 GB) in a few seconds. Hmmm, think Netflix or Blockbuster amongst others would like that available for customers? Naahh. Who watches movies?
have we forgotten so soon the web design advice to not add images to web pages because of slow load times? Browsers still have options to stop image loading and they all cache images to reduce reloads. This is all a low bandwidth legacy.

After the last dot.bomb, there was a lot of so called "dark fiber" in the ground, fiber optic cable that was not turned on because there was insufficient demand for the bandwidth. Funnily enough, Google has been buying up that bandwidth.

I have DSL, but you know what, actual downloads are far slower that the speeds you pay for. Has no one here experienced streaming movie clips that freeze because the buffer is filling more slowly than play speed.

Hands up Skype or Yahoo messenger users who use a web cam. How smooth is the frame rate, and what is the resolution of your web cam? We prattle on about global warming, yet so much of business travel could have such a low carbon footprint by substituting really good video and computer to computer communication. That needs bandwidth, lots of it.
The US, indeed the world, has hardly started to build true "information superhighways".

[anne]

Heck, whether our university or showcase public library Internet connection, simply loading important still photographs with significant definition has often been a problem. Skype is terrific, but not for video here as opposed to, well, Europe. Funny thing about western Europe, which is aawfully comparable in all sorts of size ways to America, but which can never be compared with America because, well, you know, Europeans have, say, like, health care and stuff we prefer not to know about.

Europe, bad, France worse, Norway, OMG!

[anne]

Whether the Federal Communications Commission or the Federal Trade Commission or the Postal Commission or the Social Security Commission or the Interior Department, or NASA, or the Surgeon General's office, there is seemingly no administration department that has not been heavily slanted on policy or decision to business interests these last 6 1/2 years. The results range from subversion of the Endangered Species Act to allowing Time Warner to design postal rates expressly harmful to small publishers to neglect of home planet climate observation, and on and on.

[anne]

[When I noticed the following heading, I just laughed and moved along. Spiegel is simply projecting what Spiegel wishes.

http://www.spiegel.de/international/business/0,1518,495660,00.html

"The End of Collective Bargaining in Germany? - Spiegel"]

[Alex Tolley]

anne: The slant towards business has been going on much longer than during the last administration. The very pro-business 1996 Telecoms Act was during the Clinton administration, but certainly Republicans were a majority in Congress at that time. What I would say is that the pro-business slant has become progressively more pronounced. Whether that is due to ideology or due to the needs of campaign financing, I don't know. I think one would have to show the slants through a much longer period of US history to separate out which of those two causes was the more important (if indeed they are the causes).

[Suvi]

"...the best in the world are the South Koreans who have a highly penetrated customer base.

Indeed, Lafayette - and Japan and Taiwan are up there with them.

I did a double-take when I saw this, but apparently people in those countries can get 50 MBit connections for around $20 per month, unless I was seriously misreading.

And here was me thinking I had a good deal with 3 MBit for €26 per month. Oh well...

[worker]

Re "Protecting Internet Democracy"

The thing about the current net neutrality bill is that it is not about democracy or diversity of opinion for the organized "pro" camp. It is about eliminating economic measurement of bandwidth consumption so that web operators can pump digital television equivalent (you tube) through the RBOC's network at no cost. While most people probably agree that they don't want Verizon leveraging its local-loop dominance to provide a 1 dimensional world wide web (by charging content providers), they also don't want congestion. Creating a different class of service for wholesale streaming video is hardly "censorship". Bandwidth scarcity is more relevant in the wireless world where bandwidth is more scarce.

Or on a more practical/ detailed level, should Verizon be forced to deliver my hypothetical pseudo-cableTV channel of streaming video from my server farm in CA to all of its customers? Or should I be required to interconnect my server farm closer to the customers. If so, how close? Maybe I have to mirror my server farm at each RBOC neighborhood end office? These are the practical questions that need to be answered (but aren't) in the net neutrality debate.

[kelly]

"Peter Schaeffer says...

I hate to rain on anyone's parade. But population density has much to do with this. The US is less densely populated and that impacts telecom."

I live at the end of a gravel road in the woods, 5 miles from the DSLAM. I get 1300k actual on 1500k nominal account for $40. My local phone company is a smallish coop which I believe is the reason we get great service. Some services don't lend themselves to economies of scale.

As we are not spaced evenly across US countryside population density argument is a bit of the mark. Most of the US population lives in clusters as dense as Europe.

[Bruce Wilder]

str: "Other than downloading movies I can't think of any home or small business operation that would require such extreme high speed."

This should be inscribed somewhere as a save_the_rustbelt classic.

[Paul Krugman]

Hi all. I see that there was some discussion of South Korea, population density, and all that. I looked into that a while back, and SK really is a special case. It's not just high density: it's the fact that so many people live in huge apartment blocks, which has made special access arrangements easy.

But beyond that, it's a non-issue. There's a lot of open space in America, but nobody lives there. And it's very hard to argue that the population density here in central New Jersey is too low to support the kind of internet access the French, or even the Japanese, have been getting.

[billy]

While most people probably agree that they don't want Verizon leveraging its local-loop dominance to provide a 1 dimensional world wide web (by charging content providers), they also don't want congestion. Creating a different class of service for wholesale streaming video is hardly "censorship".

Proof please.

If I subscribe to a service that is providing me 10MB/sec, it should not matter to the carrier what is being sent on the pipe. I can use 10MB/sec for sending a humongous amount of simple plain text emails, or a small clip of video.

I am paying for receiving 10MB/sec

Youtube is paying for a gazillion MB/sec connection.

Why should anyone - me, youtube, or anyone in between me care about whether it is video, text or whatever the data is about?

Does anyone charge extra for sending a fax over the phone line?

What next? If I plug in my dvd player, the utility is going to charge me more? No, it's not a joke - this is exactly what the "video" argument corresponds to.

The entire story about trucks and clogged roads used to describe the internet is a deliberately contrived story, constructed to mislead the public, so that they don't understand the truth about the technology.

Both the consumer and the content provider are already charged for the data transmission - the content provider pays for sending the data and the consumer for receiving the data.

The correct analogy is not between the post office and the Fedex. The correct analogy is when Fedex decides to open the envelopes, and charges more for the envelopes carrying cheques, and delays delivery if the sender does not pay it.

The carriers want to collect tolls on the content. They just want to steal.

[billy]

Does anyone charge extra for sending a fax over the phone line?

..."charge more"..

[kthomas]

billy "The carriers want to collect tolls on the content. They just want to steal."

billy, you hit the nail square on the head.

This is why the actors and writers guilds are clamoring for more rights to these types of transmissions, and why a strike in Hollywodd is looming. The guilds know what the telcos are up to, as do the studios, and so everyone wants their cut.

Whatever happened to deregulation bringing more competition and lower prices?

[Alex Tolley]

Link to HR 2917

http://freepress.net/congress/bills/dorgan_snowe_110th.pdf

Look at section: 12 on p2:

The bill is a bit vague, but it appears to state that content prioritization (e.g. video vs html pages) can only be determined by the content providers bandwidth service and that prioritization must not distinguish between provider sources, that is the carrier cannot give company A's video service priority over company B's.

Thus there are 2 important pieces that need to be addressed.

The first is prioritizing content by type. This is the Ted "internet tubes" Stevens's issue of video streaming that takes up a lot of bandwidth vs web browsing, that takes up relatively little. The way this works today is that the content provider, e.g. YouTube pays for bandwidth to have their content delivered. In Stevens's terminology, the provider says that they will guarantee that the freeway will be big and open enough with enough trucks to carry your data to the customer without jams for X$. So the content provider pays for that already. The onus is on the carrier to have enough bandwidth to meet his delivery obligations. What the telcos want to do is say - "well there is limited bandwidth, and this video streaming looks like it is profitable for YouTube, so let's get them to pay a toll because it is profitable by artificially forcing their trucks through side streets to slow them down unless they pay to stay on the freeway with the rest of the traffic". Sounds like banditry to me. If there truly is a bandwidth issue, then bandwidth charges should be high enough and non-discriminatory for the telcos to add more bandwidth. Given US rates, one might like to know why that isn't already happening.

The second provision is the one that is most important, and that blocking is for more insidious reasons. If they can prioritize between clients, they can use the bandwidth scarcity to charge a toll for "premium service" to a preferred provider, thus providing a higher quality of service to an arbitrary vendor based on a toll, not on bandwidth. Most like it would be for an offering they have an interest in - say a deal with a video content provider. Now that would be very lucrative, as content providers, say in the video streaming business could be forced to bid against each other for limited bandwidth, much like the radio spectrum auctions. This would have nothing to do with bandwidth per se, simply the means to controlling content. And if you can discriminate, well why not do the same even with relatively low bandwidth sites, like say eBay?

So that is what the fight is about. Unfettered, non-discriminatory access based on bandwidth fees vs. discriminatory toll gates for preferred providers. By being able to achieve the second option, telcos can use their monopolies to milk the profitable media companies.

[anne]

Thank you for the clear depictions of the "net neutrality" issue; these will help me understand.

[Alex Tolley]

The last mile.

One of the reasons given for low DSL bandwidth to the end user is the so-called "last mile" - the wires from the local RBOC building to your premises. The cross country backbones are nice, shiny, new, fiber optic cables, but these wires to your house are a pair of copper wires put in maybe 50 years or more ago. Telcos are forever telling us how expensive it is to change these wires. Now where I live in affluent Silicon Valley, telephone wires come delivered via rather ugly telephone poles in the street. So what is so expensive about adding a tiny bundle of fiber to this line? The existing copper line can remain the support or be removed, the telcos choice here. The telcos won't rewire your whole premises, just the access point - i.e. one outlet in the kitchen/living room that is near their junction box on the outside. Want the house rewired, that's your problem.

So would someone with some knowledge in this natter explain why this is apparently so expensive? And would the free marketeers explain why this infrastructure cannot be created and owned/operated by independent vendors rather than the RBOCs? Has it really become the case that those wooden poles stuck in the ground are now, per sq foot, the most valuable real-estate around?

[Lafayette]

AT: Now where I live in affluent Silicon Valley, telephone wires come delivered via rather ugly telephone poles in the street. So what is so expensive about adding a tiny bundle of fiber to this line

All the affluence in the world is not going to save a fiber optic cable swingin' in the wind on top of a pole.

Fiber optic is best planted and that costs money. Still, time to get on with it, whatever the cost.

Once again, I lament repeating the same message, we are in a "public service market" that is being managed according to free market principles that do not apply. And, to develop profits from it, then monopoly network structures must be employed.

The US should have created a semi-private company to string out the long distance fiber optic lines (along train track right of ways) and simply start planting the local loops. Had this been done during the dot.com days, most of America would be connected today. And, in the more rural communities string out long-distance optical cable to a WiMax service. This isn't rocket science.

Speaking about rockets, why is it that America could create a NASA to go to the moon, but cannot task another public service agency to have a first rate telecoms network right into our residence?

Too simple? Too stupid?

[Farrar Richardson]

Another testimonial from France. I am paying 30 euros per month for a download speed of 17 mega/second last time I checked. It may be faster now as there is strong competition and the companies are constantly tweaking the service.

This also includes IP phone service to 49 comuntries and television.

Contrary to Lafayette's testimony, I find the IP phone service to be excellent - better than the analogue I used to get from France telecom.

The television I find rather spotty, although I should be able to get faultles HD Tv at 17 mega. Anyway there are few HD broadcasts, and none without extra fees.

And the digital TV here over antenna is excellent.

It helps that I am only 500 metres from the DSLAM, measured in length of copper wire.

By the way, I would have the choice of about five companies providing similar service - four over copper phone and one over cable - the cable service is considerably faster, but also more expensive.

[donna]

If the government hadn't selected Lockheed for the F-22 program, we might all have satellite internet connectivity. The company I worked with then, ViaSat, had the capability in the works but needed Lockheed's funding to launch the satellite network. Still no big players available to make that happen, I guess. But then Boeing backed out of ViaSat's satellite airplane internet connectivity program too since the airlines didn't have any money to buy it after 9/11 nearly bankrupted them.

Why one might almost think our government doesn't want people to have fast Internet access. But then, they didn't want us to have secure computers in the 80s either. But that's another story.

[anne]

Farrar Richardson says...

There is competition in France, but I absolutely positively refuse to believe that there is competition in France. Likely as not Farrar and Donna were switched at birth and have never known or forgotten. But that's another story.

Really though what is it about this country that we are passing through a period of disdain for what government can mean that infrastructure development is so sadly neglected? Some of us at least, Brad DeLong says half of conservatives, are barking mad.

[evagrius]

Maybe the U.S. is in a "high level equilibrium trap" on purpose.

[dk]

(I used to be in IT, I worked for a midwest ISP).

SBC/Ameritech used to provide a CLEC/ILEC type of arrangement with local ISP's in the midwest. They owned the DSLAM, but would allow ISPs to resell DSL lines, where they'd pay a wholesaler price (per line), and provide all connectivity from the ATM cloud to the internet.

What we experienced from this is that the CLEC/ILEC arrangement alone was totally insufficient to providing a marketable substitute to telco-provided DSL. The real problem ends up being the long-distance regulation as a result of the ATT consent decree. Because the Bells are unable to provide inter-LATA (basically long-distance, but for data too) service, it's nearly impossible to get the scale necesary to cover the line cost for the DS-3 connection to the ATM cloud.

So even if common-carrier CLEC/ILEC legislation were to pass, it's really an uphill battle. It would only increase choice in dense single-LATA metropolitan areas, if that. We would need some reform/altering of cross-LATA regulations in general to get CLEC-type isp services to a marketable pricing point.

[benamery21]

Tolley:
Silicon valley wants to rewire the last mile on existing wood poles in California.

Utility poles in California are generally subject to CPUC regulation. Any change (other than like for like maintenance) to what's on the pole requires an engineering wind-loading calculation. Because the PUC changed the margin of safety required in these wind loading calcs back in the late nineties, doing basically anything overhead in the state, generally requires changing the poles. Typical pole replacement costs for electrical distribution class poles (the ones that are usually shared with telco and cable) are currently in the neighborhood of $10K per pole. Underground replacement is even more expensive.

Should it cost that much? I don't think so, but there is a continuing labor shortage in the utility industry and that isn't going to change any time soon. Slacking real-estate markets will help some since fewer utility/contractor crews will be tied up working on the next new tract of homes or the latest strip mall.

[Peter Schaeffer]

Mr. Krugman,

While it may appear to you that central New Jersey is densely populated, it is somewhat empty compared to Paris, London, or Seoul. Princeton University is located in Mercer county which has a population of 350,761 (2000) and a land area of 229 square miles. This works out to be 1,532 people per square mile. This is somewhat above the average for all of New Jersey of 1,174 people per square mile. Note that New Jersey is the most densely populated state in the nation.

By contrast, Seoul (10.356 million people) has a population density of 44,310 people per square mile. Central Paris (2.154 million people) has a density 64,186 people per square mile. A better comparison is Urban Paris with a population of 9.645 million and 9,173 people per square mile. Greater London has 7.7 million people and 12,644 people per square mile.

According to “All US Urbanized Areas:Analysis by Region and Size Classification: 1990” (http://www.demographia.com/db-ua90anal.htm) American “Central Places” average 3,320 people per square mile. By contrast, Suburban places average 2,131 people per square mile. The urbanized areas have a total of 158.259 million people (1990). The other 91.374 million Americans in 1990 lived in even less densely populated areas.
These numbers fit with statistics for particular areas. Greater Boston has 2,322 people per square mile. Harris County, TX has 2,077 people per square mile.

An international comparison may help here. According to “2nd Annual Demographia International Housing Affordability Survey: 2006” (http://www.reiaustralia.com.au/documents/dhi-ix2005q3.pdf) new detached houses are built at a density of 2.7 per acre in the US. By contrast, they are built at 16 per acre in the UK and perhaps 20 per acre in Dublin.

What should be clear from this is that the built-up areas of Asia and Europe are much more densely occupied than those of the United States. As one would expect, these differences impact the cost and availability of broadband in the United States versus other countries.

In some respects, the two most similar nations are Canada and Australian. Canada ranks 9th with 23.8 broadband subscribers per 100 inhabitants compared to 19.6 in the US. Australia comes in just slightly below the US with 19.2 subscribers per 100. By contrast, Korea has 29.1 per 100 and Denmark (ranked number 1) has 31.9 per 100. France has 20.3 per 100, only modestly ahead of the US. Given France’s de facto population density, a higher number might be expected.

France looks better if you look at broadband speed. France averages 17.6 mbps versus 4.8 mbps in the United States. Canada is faster as well at 7.6 mbps, but at a cost per mbps almost double the US. This data is from the ITIF Broadband Rankings (see http://www.itif.org/files/BroadbandRankings.pdf). The US comes in 12th in the ITIF rankings, two below Canada and two above Australia.

This data shows that the US isn’t doing that badly once you adjust for the physical characteristics of each nation. Of course, the US could be doing better as Canada’s performance demonstrates. However, comparisons to much more densely populated nations aren’t reasonable if you fail to consider density.

[Peter Schaeffer]

One more note. The Toyko-Yokohama region has 31.2 million people and 15,400 people per square mile. Note quite like Mercer county New Jersey.

[anne]

"While it may appear to you that central New Jersey is densely populated, it is somewhat empty compared to Paris, London, or Seoul."

Who knew?

[French]

I am in France. The price for internet, TV and fixed phone(unlimited) is 30 euro per month.

[anne]

"While it may appear to you that central New Jersey is densely populated, it is somewhat empty compared to Berlin, Dublin, or Hong Kong."

"While it may appear to you that central New Jersey is densely populated, it is somewhat empty compared to Chicago, Miami, or Houston."

"While it may appear to you that central New Jersey is densely populated, it is somewhat empty compared to Madrid, Stockholm, or Melborne."

"While it may appear to you that central New Jersey is densely populated, it is somewhat empty compared to, Boston, San Diego, or Alanta."

[Lafayette]

FR: I would have the choice of about five companies providing similar service

The other side of the coin

You obviously live in a large city in France, FR. I live in the boonies. The two services provided are night and day, because the market contexts are quite different. Distance makes all the difference, and particularly for DSL-transmission.

In fact, in a France that is soooo concerned about social equality (of chance) and where a television antenna is considered an undeniable freedom (the law does not permit anyone to prevent you from mounting an ordinary television antenna for whatever the reason); it is difficult to imagine why the rural communities are penalized as regards hi-speed bandwidth. Except for one obvious fact, with enough money these communities could have a decent WiMax transmission network.

And, why are the regions (states, in America) so poor? Because they are exhausting their meager budgets with providing comfy jobs instead of real public services in a country where city hall staff would be otherwise unemployed. Theirs is "make-work" in a nation that is not creating "real" jobs. In the French countryside, a young person's "dream of a lifetime" is to get a job either teaching or working somewhere in a city administration. The pay is awful, but it is a job.

France, where prevails the fine art of making mediocrity banal. Ya gets for what ya pays.

Old French joke: Why is the cock the French national mascot? Because it is the only bird that nows how to sing with its feet firmly planted in the sh*t.

[anne]

"In the French countryside, a young person's 'dream of a lifetime' is to get a job either teaching or working somewhere in a city administration."

Whatever are you prattling on about?

[Farrar Richardson]

Anne and Lafayette:

"In the French countryside, a young person's 'dream of a lifetime' is to get a job either teaching or working somewhere in a city administration."

Unfortunately, this is often true in rural areas. (I have some experience with these as I lived in a small French town of 1500 souls for nearly 30 years, before moving to a city last year.) I see this as a 1930's mentality which is gradually fading away as my generation dies out. I suppose this was a reaction to a hierarchical society, where the emphasis was on having a "bonne situation" rather than work you enjoyed. Or perhaps depression era insecurity. Obviously there are limited opportunites for employment in the country, except perhaps for the building trades - houses for retirees. Agriculture and fishing have less and less appeal. Work in the bureaucracy or in teaching can be a safe way to move to an urban area, a change which can be scary for those attached to their communities.

As for DSL in the country, we had 600K download at 4km from the DSLAM. It's true the new companies have little incentive to go into rural areas, and when they do, the service costs more than in the cities. I understand France telecom is now providing faster service - about 7-8 mega, but at a price.

Even at 600K, I usually had better quality audio with Skype than with traditional analog, with one notable exception, I usually couldn't get through to Verizon subscribers, and I wonder if Verizon was somehow blocking Skype?

[Lafayette]

FR: I would have the choice of about five companies providing similar service

The other side of the coin

You obviously live in a large city in France, FR. I live in the boonies. The two services provided are night and day, because the market contexts are quite different. Distance makes all the difference, and particularly for DSL-transmission.

In fact, in a France that is soooo concerned about social equality (of chance) and where a television antenna is considered an undeniable freedom (the law does not permit anyone to prevent you from mounting an ordinary television antenna for whatever the reason); it is difficult to imagine why the rural communities are penalized as regards hi-speed bandwidth. Except for one obvious fact, with enough money these communities could have a decent WiMax transmission network.

And, why are the regions (states, in America) so poor? Because they are exhausting their meager budgets with providing comfy jobs instead of real public services in a country where city hall staff would be otherwise unemployed. Theirs is "make-work" in a nation that is not creating "real" jobs. In the French countryside, a young person's "dream of a lifetime" is to get a job either teaching or working somewhere in a city administration. The pay is awful, but it is a job.

France, where prevails the fine art of making mediocrity banal. Ya gets for what ya pays.

Old French joke: Why is the cock the French national mascot? Because it is the only bird that nows how to sing with its feet firmly planted in the sh*t.

[anne]

Ah, I understand now, but there is limited employment opportunity in rural America as well. We are becoming increasing urban or near urban. As for teaching, why should that be held a minimal occupation anywhere? Are teachers poorly treated in France? That is not my impression. Similarly, I find no reason not to work in any facet of public administration. Where is the unique French problem?

[anne]

Also, I find Lafayette's stereotypical prejudicial joke crude, rude and stupid.

[anne]

There seems a peculiar crudeness and meanness in continually ridiculing an entire people among whom you are a guest.

[Lafayette]

anne: Whatever are you prattling on about?

Ya gotta see it to believe it.

Beware of false gods. An excellent health system is not the only criteria of well-being, though it is from an American point of view.

Far more pressing, for France, is employment. Young adults that have to wait five or six years for durable employment and then one that is not in their domain (of studies) - or is abroad, where employment is being created (the UK, Holland, Denmark). [Yes, education is practically free, but for what purpose? Hardly for getting a job, unless you specialized in "sales" or "business" (MBA).]

The others, without a smattering of English, remain in their suburban ghettoes, throw stones at the odd police patrol car and burn their neighbor's car ... to pass the time of night, shouting "Inch'Allah!" (NB: Just after Sarkozy's election, the following two nights that celebrated his inauguration, some two hundred cars were burnt in anti-Sarkozy demonstrations throughout France.)

Watts was worse, these demonstrations are "petites Watts" by comparison. But, they accumulate. Like Chinese water torture, they wear down a government because they are ALWAYS on the nightly TV-news editions.

France is in "demo mode" -- meaning a public will to show discontent by means of strikes and other demonstrations. Sarko's honeymoon with the public will come to a screeching halt in September when everyone goes back to work.

He is doing his utmost to get traction with his political platform that was limpidly clear to the electorate. (Which was knew to French political campaigning.) He's chasing time nonetheless.

One can only wish him luck. Another ten years of immobility and France could get very nasty indeed.

NB: The French parliament passed a law last week that limits "golden parachutes" to executives of French companies. Warms the cockles of me heart, it does.

[Lafayette]

anne: I find Lafayette's stereotypical prejudicial joke crude, rude and stupid.

Well, it makes the French laugh. Which is/was its primary intent. Perhaps you have to live in France to understand it.

I will spare you the pain in the future.

[Lafayette]

anne: There seems a peculiar crudeness and meanness in continually ridiculing an entire people among whom you are a guest.

It's a well-known joke in this country, Anne.

Get off your high horse.

[Cyrille]

Sarkozy promised everything and its opposite, so if that's limpidly clear...
What's limpidly clear is that he has about as much regards for the rule of law as Dick Cheney, combined with practicing the public appearance of Silvio Berlusconi.

[Lafayette]

anne: As for teaching, why should that be held a minimal occupation anywhere?

Never said that, never would.

It is the ONLY job going in rural France, that and mounting a tractor to till the soil - or working for the county road department or some other city/state job.

And, if your parents are teachers, you have "preference". Meaning you get the job even if someone else is more qualified and has a better degree than you. Merit is not a word that France yet understands in terms of a professional career. You are expected to wait your turn. Cronyism abounds. Particularly if you are a Freemason and if you are from the "right school" (meaning university) – and have friends in government positions.

France has always worked that way. Italy too. It’s prevalent amongst Latin cultures. The society is highly hierarchical. Which is one reason why a young Frenchman of immigrant parents, who became President, is such an event in the history of France. Ordinarily, he shouldn't have a snowball's chance in hell. (Segolene's candidature was also surprising, considering she was a woman. It furthered greatly the political ambitions of women. Good for her, even if she had a political platform that was ridiculous.)

Teaching is a low paying job. I know plenty of teachers – I teach occasionally -- and I have always supported higher pay for the profession, because it is an extremely tiring job (physically and mentally).

When I tell them how much American teachers make (my sister is one), they faint with envy.

[anne]

The joke is prejudicial nonsense, and rude and crude as well though rude and crude and prejudicial may please some.

[Farrar Richardson]

Laf -
"And, why are the regions (states, in America) so poor? Because they are exhausting their meager budgets with providing comfy jobs instead of real public services in a country where city hall staff would be otherwise unemployed. Theirs is "make-work" in a nation that is not creating "real" jobs."

Since you headed your post "The other side of the coin", I think you are exaggerating and know very well you are exaggerating, probably in order to make a point.

This is what one might call the small shopkeeper's point of view in France. Thes are the people from whom Lepen drew his support, but who switched massively to Sarko for the last election. Analysis of the vote shows very small business owners were the strongest supporters of Sarko.

There is a bit of truth in what you have written, but in my experience the "make-work" projects are not simply comfy jobs,, but provide real service to the communities which are not supplied by the market - helping care for old people in their homes, maintaining parks and gardens, even rural roads, which in my experience are much better in France than is US.

[anne]

What then are salaries and conditions like for teachers in French schools?

Lafayette says...

FR: I would have the choice of about five companies providing similar service

The other side of the coin

You obviously live in a large city in France, FR. I live in the boonies. The two services provided are night and day, because the market contexts are quite different. Distance makes all the difference, and particularly for DSL-transmission.

In fact, in a France that is soooo concerned about social equality (of chance) and where a television antenna is considered an undeniable freedom (the law does not permit anyone to prevent you from mounting an ordinary television antenna for whatever the reason); it is difficult to imagine why the rural communities are penalized as regards hi-speed bandwidth. Except for one obvious fact, with enough money these communities could have a decent WiMax transmission network.

And, why are