Who Really Controls the Future of Broadband Access?

It seems that almost every industry today is standing in line for a stimulus package. Apparently we all need to be stimulated and in more ways than usual. There is no doubt that our financial and overall economic situation is dire, but with time, honesty and focus we should be able to resolve the issues and move forward. The stability of the nation is at stake and the consequences of failure or inaction are not acceptable. One thing that is for sure is that the problems will not fix themselves. Ignoring them only makes matters worse.

It is a shame, but almost human nature, that issues go unaddressed until they become real problems. Something has to break before someone will actually fix it. We actually have an adage that speaks of the reverse “If it isn’t broke, don’t fix it”, but this applies to things that are working and performing to a satisfactory level. The question is, satisfactory by whose standard? When the system is so large that no one can see it all at one time, the macro and micro, then it is very difficult to assess what is working, what is not and who is benefiting and who is not.

Perhaps another issue: what is the definition of “broke?” It is becoming clear that our financial system is broken and if 30:1 leverage is no longer acceptable on Wall St. and therefore doesn’t work for Main Street then the Federal Reserve Bank printing endless dollars will certainly lead us to all be broke, as in bankrupt. The threat of this is real and puts everything else into perspective. If trust and faith in the US dollar are lost then nothing else really matters. Assuming that everything works out with the financial system, the rest of the country and world will proceed with their regular routine to the best of their abilities.

There are many lessons that can be learned from this current financial crisis and applied to many other areas, but the baseline lesson is probably the need for preventative maintenance. A “greater-good” approach to the Country, something the Founding Fathers possessed, is required in order for us to have a viable, scalable and sustainable model for our way of life. That way is the way of freedom and in that the system usually rewards positive performance. It doesn’t always work out that way, but at least in this country everyone has an equal chance. Or do they?

Over the past ten years it has become incredibly obvious that knowledge is power and networks deliver knowledge. With the power comes money. With money comes growth. It is a simple equation. It is a machine. If its pieces are assembled properly and it is well-oiled with no false restrictions it works.

There are numerous reports that have been published over the past several years that substantiate the direct positive effect broadband has on the productivity of individuals both personally and in business. This can be nothing but good for the economy. So, what’s the hold up?

Special interests, as in those with vested interests in controlling growth and the outcome so that the success is largely theirs, try to do so by controlling the flow of investment and regulation in broadband deployment on a grand scale as well as at a tactical level in the field. Keeping regional networks and people isolated and disparate blocks their ability to organize, unify, collaborate and succeed independently and as a group. The results of this control are not only very detrimental to these isolated networks and individuals, but also the overall probability for the success of the country.

Much has been said recently about President Obama’s Broadband Stimulus Package. Most notably to me is that the $6 billion figure is woefully inadequate and that even with that amount most of it will go to incumbent carriers. It is true that $6 billion seems like a small number when it is compared to the original $700 billion financial stimulus package, or the new $825 billion package, but $6 billion can go a long way if it is allocated and spent wisely. That probably will not happen though. A large portion of the funds are already set aside for incumbents it seems. Giving more money to the incumbents thinking that they will do “the right thing” with it is like letting our government be responsible for foreseeing financial catastrophe and doing something to prevent it. Here is another adage: “If you want it done right, do it yourself.”

The willing and able out there in the U.S. that have an interest or something to gain from true broadband access being deployed need to take calculated, specific action regardless of stimulus availability. The first step is to attain the knowledge of where major carrier and large enterprise networks interconnect to each other today. The reason why this knowledge is essential is that it differentiates the where from the how. There is a difference and it matters. The how comes down to finding fiber, choosing transport equipment, getting space and power for a cabinet and the equipment in the interconnection facility – all of which is possible today, right now. The justification process begins with contacting the other 100+ network operators already in the interconnection facility, figuring out how much can be saved in operating expense (typically 50 percent) from wholesale providers and how much revenue can be generated from new sales (typically 50 percent) and then working out business terms. Building it like they do starts with knowing where they do it. Anything less is philosophically, technologically and financially inferior. This call to action is most relevant to members of organizations such as OPATSCO – the Organization for the Promotion and Advancement of Small Telecommunications Companies, the United States Telecom Association and others like them.

The irony of this first step is that the knowledge does not cost anything to acquire except honest intention and a desire to know. Those that are in control do not wish to share their “secrets,” but they cannot keep them from anyone. There are no forms that need to be filled out and no approvals necessary to build the best possible physical network with every dollar available to be spent. Most, if not all of those dollars can come straight out of existing cash flows from operations and do not require any grants or loans from the government. No matter what it costs to get to every town and village in the U.S., if only a few companies (the incumbents) assumed responsibility for building the necessary fiber and providing it on a cost-effective, realistic basis, it certainly would cost more time and money than if the communities and local operators themselves were enlightened and motivated enough to build networks that reach the other major networks. The positive results achieved by service providers that have already done this should be enough to stimulate those who have not.

If anyone wants to know where these places are and what is the best way to get to them, just ask. IP

Hunter Newby is a monthly contributor to IP Business and can be reached at hunter@hunternewby.com