What's missing from this theory is a little analysis. Historically, communication has been far more prized than content. Annual movie-ticket sales in the U.S. are well under $10 billion, notes Andrew Odlyzko, director of the Digital Technology Center at the University of Minnesota and author of a 2001 paper "Content Is Not King." Phone companies collect that amount every two weeks.

The only way out of this is to let communities build their own broadband systems.  However, cable companies and telcos are fighting this in state courts. 

Don't expect the interlopers to make much headway soon, however. So far, incumbents such as Verizon have succeeded in persuading 10 state governments to limit the freedom of municipalities to provide telecom services, including broadband -- or prohibit them from doing so altogether. In fact, Bristol was able to proceed only because it won a court victory overturning the state law that banned local telecom services. And the Virgina state government is appealing the decision.

In our community, the cable contract we were forced to sign specifically forbade the town from allowing competitive systems.  Rather than fight it, the town relented. 

If the US government wants to really do something to unwind this mess, it should make it possible for any town in the US to build a local broadband network that competes with the telcos and cable companies.  I bet I could attract 1,000 + people in my town to pay $200 up-front and $25 a month for true fiber-based broadband access if a smart entrepreneur decided to offer this as an alternative.

3:48:56 PM    comment