Comments on "Solving the broadband paradox" by Adam D. Thierer,
  published in "Issues in Science and Technology," Spring 2002, pp. 57-62

                   Andrew Odlyzko
                   odlyzko@umn.edu
              http://www.dtc.umn.edu/~odlyzko



As Adam Thierer points out, "the public has not yet caught broadband
fever."  This should not have been surprising.  The rates of adoption
of dial Internet access, as well as the utilization patterns of data
networks, proved many years ago that the "insatiable demand for bandwidth"
was a myth.  New products and services take time to diffuse widely.
Today, when offered the choice, most people vote with their pocketbooks
for extremely narrowband wireless phones over comparably priced DSL or
cable modem links.

Although mobility currently trumps broadband in the market, that may not
persist for ever.  Adoption rates for broadband, although disappointing
by the expectations of Internet time, are high, higher than those of cell
phones at a comparable stage in the development of the wireless industry.
The question is whether we should strive to increase these rates, and
if yes, how to do it.

Thierer dismisses "spending initiatives or subsidization efforts" as
"unlikely to stimulate much broadband deployment."  That is surely
incorrect.  As the example of South Korea (with over 50% broadband
penetration) shows, lower prices can do wonders for demand, and some
"spending initiatives or subsidization efforts," if well targeted,
might lower prices in the US.  However, Thierer is likely right that it
would be unwise to make giant investments of public money in this area,
where technology and markets are changing very rapidly.

Thierer's main prescription is to deregulate the Baby Bells.  In the
interests of brevity, I will not discuss the reasons I feel this would
have perverse effects.  Instead, let me suggest three other methods for
stimulating broadband, one intriguing but totally impractical, one very
practical but incremental, and one speculative.

The impractical method for stimulating broadband adoption is to make music
free on the Internet.  As Thierer notes, Napster and its cognates have
been among the main reasons people buy broadband connectivity.  Instead of
using the law to choke file swapping, perhaps we should encourage the
telecom industry to buy off the music studios.  Total recorded music
sales in the US come to a grand total of about $15 billion per year, while
telecom spending is over 20 times higher.  Thus in the abstract, it might
be a wise investment for the phone companies to buy out the studios.
This is of course wildly impractical for business and legal reasons,
but it would quickly stimulate demand for broadband.  (It would also
demonstrate that the content tail should not be wagging the telecom dog,
as it too often does in political, legal, and business discussions.)

A more practical method for stimulating broadband is to encourage
migration of voice calls to cell phones (which currently carry well
under 20% of total voice traffic).  This would force the Baby Bells to
utilize the competitive advantage of wired links by pushing broadband
connectivity.  This migration could be speeded up by forcing the Baby
Bells to spin off their wireless subsidiaries, and by making more spectrum
available for cell phones.

The third technique for stimulating broadband is to encourage innovative
new wireless technologies, such as those using the unlicensed bands (as
in 801.11b, aka WiFi) and Ultra Wide Band.  The technical and economic
feasibility of these technologies for providing connectivity on a large
scale is unproven as yet.  However, if they do work, they might offer a
new mode of operation, with most of the infrastructure owned and operated
by users.