Gilder’s Broadbandits


The Wall Street Journal has an op-ed by George Gilder, titled, Stop the Broadbandits. First of all actually very flattering because the word that was on the cover of my book, is now part of the lexicon. Cool! Even if it was used on an article by a Broadbandit himself. (It is funny how trouble comes in threes – Grubby, Ebbers and Gilder are making an appearance in quick succession!)

What really ticked me off about this article was Gilder’s born again righteousness about telecom today. He jumps all over Reed Hundt, and his FCC. (I pointed that out clearly in the introduction of the book, but never mind!) What he fails to disclose that he was the spiritual adviser to Newt Gingrich, the other architect of the Telecom Act of 1996. Al Gore & Gingrich, Gilder and Hundt – they were the powers that be that shaped that misguided Telecom Act of 1996. But that is not enough – Gilder sidesteps his role in the bubble and blames it on Hundt. Oh never mind that Gilder Technology Report was the tip shit of the telecom bubble.

bq. Rare it is in politics and life to get a second chance at a huge opportunity. But by reversing a catastrophic decision of the Federal Communications Commission that has paralyzed America’s telecom industry, a U.S. court has given the Bush administration a new chance to escape the blame for killing broadband in the U.S.

In case you did not get his loopy comments, Gilder is talking about UNE-P. He is defending the Bells and their chimera of fiber to the home. With the exception of independents, the Bells are not going to plow their money into fiber. They are happy with wireless, and will spend billions on it. UNE-P legal wrangles are simple delay tactics to weaken rivals. Gilder the champion of the smart networks is defender of the telecom monopolies. He misses the point, and fails to understand that this UNE-P court decision is perhaps a white edge of the coming VoIP Tsunami.

bq. The Bush administration now has a chance to release U.S. technology companies and communications markets from a multi-state schlerosis that is driving Internet leadership, wealth and jobs massively to Asia. At the root of the dot-com, stock market, IPO, and job debacles was a disastrous Clinton-Gore telecom policy that was ripe for reversal.

What! Duh! Shit! Crap! Nevertheless he answers himself.

bq. But last-mile technological progress has stopped as a result, replaced by pettifoggery and politics. By this time next year, Verizon’s 38 million wireless customers will have faster Internet access on their mobile phones than Verizon’s wireline customers have to their desktop PCs. Only the most severe regulatory disincentives to invest could have resulted in such an outcome, which defies the laws of physics.

bq. Flawlessly executing one of history’s consummate campaigns of political lobby-gagging of rivals, AT&T has blocked Internet advance in the U.S., where both the Internet and fiber optics were invented, largely at Bell Labs. A moribund company long propped up by regulatory contraptions, AT&T has surrounded the White House with highly paid friends-of-George, good Republicans who are sound on most issues, like taxes, but out of their element on telecom and technology.

Good lord. Gilder’s track record, oblique double speak and all that stuff becomes more obvious with statements like this. Like Bells are not doing any of this. My rolodex is full of more names of the “legal” and “lobby” types representing the Bells versus AT&T.

A long time ago, I had asked him about the falling prices, the rising debt and increased competition in the bandwidth business. He dismissed me at a Red Herring conference as a pest. Well he was wrong then, and he is wrong now. WHy doesn’t he go write about some camera chip company which is private, and create a new bubble. For this time around the hindsight works against him.

And this is how he closes his article:

bq. The future will see a fibersphere of all optical networks reaching around the globe and linked to customers by a variety of mostly wireless devices. In this radically simpler and more powerful network architecture, the only locality will be the distance reachable at the velocity of light, not at the speed of politics.

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