For a century, our country has benefited from a communications social contract in telephone, broadcast, and multi-channel video in which through law, regulation, and franchise agreements, providers obtain public benefits in exchange for providing certain, limited public obligations. But how will we write the terms of the social contract between communities and communications providers in building the next infrastructure of world-class IP communications for the 21st century?
The question regarding how to build it has become increasingly important as Internet communications begin to supplant 20th Century methods of delivering voice and video, but it remains unanswered. When we developed the National Broadband Plan, we expressed our concern that the current social contracts governing communications would not create a critical mass of communities with world-leading bandwidth, without which the United States might lose its international leadership in developing the next generation of broadband applications.
The Google experiment.
Google, to its credit, stepped up and offered to build such a network, and a whopping 1,100 communities volunteered to host it. Google chose Kansas City and negotiated a deal in which the governments in that area agreed to numerous actions to improve the economics of the new deployment. Now, the search giant is building out a network that will provide Kansas City a strategic bandwidth advantage and giving its residents new options, involving both speed and price, which they did not have before.
To its credit, Time-Warner Cable, one of the two incumbent providers in Kansas City, responded in the marketplace, offering consumers higher speeds and ramping up its local staff. But now Time-Warner Cable and AT&T, the other incumbent, are responding with lawyers, petitioning the city to receive the same benefits accorded Google. This response could signal a start of a race to the bandwidth top. Or it might be the beginning a race to the bottom. So this is where things get interesting.
Get better or get out of the way.
While it is understandable that incumbent providers have not embraced the opportunity to create test-beds for world-leading connectivity, their reluctance should not slow down others who are willing to take that leap.
The only way American consumers are going to get the same level of connectivity that residents of Korea, Japan, Stockholm and other places around the world already enjoy is if we pursue local experimentation of next generation deployment solutions like Google has done in Kansas City, and others are beginning to test.
Just this week, for example, the State of Illinois, the University of Chicago, and Gigabit Squared, a private company, announced a multi-million-dollar partnership to bring new levels of connectivity to a number of Chicago communities. If our country wants to lead in the 21st Century Information economy, this is exactly the kind of effort we need to encourage.
While state and local law will control the exact response to the incumbents, Time-Warner and AT&T are, and remain, beneficiaries of arrangements that provided them preferred access to public property. Google wasn’t the first private communications company getting deals from the government. Those legacy arrangements enjoyed by incumbents like AT&T and Time Warner granted them monopolies in their respective markets, something Google will not receive.
How governments respond to the incumbents shapes the future
The current situation provides an opportunity to consider what response would actually best improve options for broadband consumers, using Kansas City as the test-bed. For example, one response would be to offer the incumbents the same deal but require the same obligations that they required from Google, such as higher speeds and free connections to public institutions. I suspect the incumbents would not agree to those terms but if they did, Kansas City would enjoy the benefits of the most competitive broadband market in the world.
Another potential response would be to provide Time-Warner and AT&T what they want without requiring anything in return. This would create a precedent that raises the cost for other communities trying to catalyze an upgrade, and thus discourages local efforts to build the kind of networks that FCC Chairman Julius Genachowski recently underscored that our country needs to be competitive. Even worse, providing such benefits without requiring any reciprocal obligations could put pressure on other communities to engage in a race to the bottom, in which local communities lose traditional benefits without gaining any better options.
It takes two to tango
The Google/Kansas City agreement only happened because the city believed the existing arrangements were not providing what it needed. In fairness to the incumbents, however, we have to recognize that the move to an all-IP world requires all levels of government to reconsider existing arrangements.
As we reconsider those arrangements, we should acknowledge that the current arithmetic of deployment does not justify an upgrade. The math, however, runs both ways. Today, private investments in a next generation network without Kansas City-like agreements are unlikely, but it’s unrealistic and unfair to ask communities to offer such terms unless a private party is willing to make a Google-like investment. We need two to tango in order to drive the next generation of upgrades.
And therein lies the opportunity. The best outcome for the country would be if Time-Warner, AT&T and others seized this moment to offer to deploy the kind of network Google deployed in other communities if those communities would provide the kind of inducements Kansas City offered. If they did so, they would find willing partners. And those partnerships would spark a race to the top that would catalyze new investments, new economic growth, and a new generation of American leadership in delivering the benefits of broadband.
Blair Levin became a communications & sciety fellow with the Aspen Institute after serving as Executive Director of the National Broadband Planning effort. He is currently Executive Director of Gig.U, a project within the Institute that seeks to accelerate the deployment of next generation networks and services by using university communities as test-beds.