Sunday, February 7, 2010

FCC Looking to Take Advantage of iPad "Crisis" to Give Away Spectrum

Remember back in 1996-1997 when the internet crashed because AOL allowed it's customers unlimited use? Oh, you don't? Well, surely you remember the headlines all over the media because AOL dial up customers experienced service outages? Oh, don't remember that? Do you at least remember the important FCC "hearings" on the issue? Do you remember AOL? They were like this big company that dominated internet access and… well, they offer free e-mail service now. You see AOL originally charged per bit and in 1996… oh, forget it.

Well, the FCC remembers! And the "crisis" of 1996 for AOL dial up users experiencing outages still rings in their ears like yesterday. No one at the FCC forgets the compelling testimony at the "hearings" on the issue. A tearful witness confessed that when they wanted to find out if "they had mail" they had to dial up repeatedly.

Thankfully, under the relentless scrutiny of FCC "hearings," some bright scientists at AOL were able to solve the crisis by "upgrading their modem and server capacities." Who would have thought?! Okay, so here is where I need to get a little technical, so try to keep up with me. You see, modems are these things that send bits of data across the internet and servers are these things that store information, or something. "Capacity" is a technical term a little too complex to go into here, but basically, more of it is better. "Upgrading" has to do with fixing stuff, often electronic things. Now, back in 1996, the internet was just beginning to take off. The concept of having to "upgrade" your "capacity" was almost unheard of. There was no way that a large company like AOL, that had been charging per bit to customers, could anticipate that demand would increase once they offered unlimited use, let alone that that demand might cause"outages." Further, no one could have imagined the solution would be to "upgrade capacity." Thankfully, the FCC had "hearings" on the issue and the problem was solved after much national hardship. (AOL anticipating customer demand for unlimited service would have been as unbelievable as AT&T imagining that millions of new iPhone customers would strain their systems.)

Well, with the coming of the iPad, bright eyed bureaucrats with long memories want to prevent another crisis. Solution, according to the FCC? Steal spectrum and give it to the big telecoms for nothing. Now, I'm not an expert on spectrum, but I suspect it has absolutely nothing to do with any issue AT&T might or might not have with providing service for the iPad. Or with AT&T's current problems servicing the iPhone. I suspect the solution to iPad demand might be that ground breaking idea from 1996 to "upgrade capacity." But even if there was any spectrum issues, it has utterly nothing to do with AOL's "historic" problems in 1996. (And the FCC can't think of anything else that has happened since then that might apply?)

AOL's problem was that it wanted to charge per bit (tiered pricing) and it's competitors didn't (because customers like flat rates). AOL waited far too long to switch over, and when it did, it wasn't ready. The real lesson of all this is that corporations shouldn't fight fixed pricing, and they need to be ready to service customers before they offer service. AOL didn't understand that, and it betamaxed itself.

Of course, that doesn't stop FCC bureaucrats in the service of big corporations from trying to use the hype of a new product people want to make unrelated changes in our nation's telecom policies to serve their master's special interests. And it doesn't stop corporate "Spin Trolls" from weighing in on the comments section to try to further the bullshit. Thus we have a "guest" comment on the FCC blog stating:

"I'm glad someone at the FCC finally understands… if we don't manage the wireless spectrum, either through tiered pricing models or forms of network management (i.e. Bit-Torrent curbs) we will end up with slow, congested, wireless networks."

First, Mr. De la Vega, if you're going to make anonymous posts, pick a clever female name and stop with the "guest." (But don't use your World of Warcraft avatar name!) Second, obviously, the lesson of AOL was that tiered pricing and limiting customers use of bandwidth DOESN'T WORK. Why would anyone suggest returning to 1995? My suggestion to AT&T is to learn from the AOL debacle and embrace customer's desires before you become a historical footnote. Like the 1996-1997 crisis that no one remembers.

Meanwhile, if the AOL crisis caused FCC hearings, why aren't they having them over AT&T's iPhone service problems? And if the FCC is worried about the iPad, why doesn't the FCC encourage the development of a national standard for wireless carriers so customers can switch easily between competing companies? Why is the solution always offered to any problem customers might have to either limit their options (with tiered pricing or denial of services) or give money to corporations (free spectrum)? How about a free market and free competition?

1 comment:

  1. Bandwidth is a concern but the better solution to this issue is more REUSE of bandwidth. The more density of cell sites you have the less users per sector and the higher speed they attain (as long as their is enough backhaul)

    ATT and Verizon can do things allot cheaper by just adding antennas and more radios to existing sites with more spectrum but it would be better for the economy and jobs to make them think and engineer more efficiently and punish them with fines for not delivering on contracted business models!