Wednesday, July 30, 2008

A Repudiation of Bandwidth Cartels...

Columbia University Professor Tim Wu writes in the New York Times today that cyberspace is on a fast-track to being dominated by a small handful of "bandwidth cartels". Just as OPEC dominates the world's oil industry through tightly controlling supply, telecommunications companies like AT&T and Comcast do the same with bandwidth, he argues, - and again, it is the consumers who ultimately suffer.

But this is a false analogy. Bandwidth cartels are not the same as OPEC. AT&T and Comcast don't meet with each other every few months and explicitly agree on how much bandwidth to provide to each home, and they certainly don't do so with telecom firms outside the country as well.

Wu's main point is to call for the development of alternative sources of bandwidth. This is a truly worthy goal, as I've written about before. But you can justify that argument without resporting to demonizing the bandwidth owners.

Drawing yet another false analogy, Wu likens the bandwidth dilemma to that of the current energy crisis. But the last time I checked, my Internet Service Provider (ISP) hadn't raised prices in three years, which is a far cry from the recent exponentially rising prices of gasoline.

To be clear, this is not to say that the AT&Ts and Comcasts of the world are innocent victims. Comcast, in particular, was recently found guilty by the FCC of blocking certain file transfers by its own customers, unfairly discriminating against heavy internet users by essentially capping the amount of bandwidth they could use (despite those customers having paid for the right to do so). So there are certainly no angels here.

Yes, there needs to be alternative sources of bandwidth, whether through public Wi-Fi networks, municipality-owned infrastructure, or co-op style sharing agreements. And yes, in the bandwidth supply industry, there may indeed be a concentration of ownership. However, that's not the same thing as a cartel which, by definition, is openly guilty of collusion.
  

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