GDP

The growth in GDP is down (3.1% growth for the quarter) and so is the market, surprise, surprise. The US is now something like 16th in bandwidth deployment. There should be a direct relationship between our failure to get past the logjam of bandwidth deployment through the ILECs, call it the last mile, and our lagging productivity. The average person sits and weights interminably for connections and data transfers. The computer use to be slow and in some ways still is but more and more our work demands not just the computer but also the Internet and that is so slow that we can count our wasted time by the hour.

GDP simply put is a product. It is the product of value times velocity and is several times greater than the total money supply because of the velocity or productivity. The value turns over several times a year and is thus a non-linear multiple. OK!

Our entire economy now leans on information and the free flow of that information; manufacturing is gone, out-sourced. When we sit and weight for data the economy hurts, we fall behind. Jobs go overseas. Technology goes overseas. The standard of living goes down. The cost of everything we value goes up relative to our ability to pay. We’re screwed.

Our Internet technology has fallen behind the rest of the world for several reasons. Security is a problem. Foreign elements, even governments are hitting on the .com Internet with malice. Viruses, spam, phishing and worse jam the system. Security alone eats much of our meager 350 to 500 kbps where the world looks to mbps and Hong Konk deploys 1 Gig-bps. The tearm "Broad Band" amounts to misleading advertising.

There is resistance to deployment of fiber optics and other alternatives for bandwidth on the part of the traditional telephone utility that has always had a fixed telephone charge and a charge for long distance. Their business model was based on communication scarcity and their ability to supply the need and the service. The phone bill has come to be an unreasonably high percentage of the small business’ fixed overhead.

The Internet has the capacity to replace the phone company entirely and herein lies the conflict. In other countries, the government has greater control over the telephone system and a greater interest in advancing their competitive technology. Here it is more of a le se fair thing supported by a valorized bueaurocracies. It leaves the incumbent local carrier free to engineer scarcity in order to maintain price and margin of an over bloated institution and an irrelevant technology.

There is an architectural conflict between the centrally controlled and routed telephone system and the Internet, which can be controlled and routed from the edge or the end user. The telephone routing resembles a star burst while the more ideal, not the one forced on it, routing of the Internet resembles a spider’s web, thus the term world wide web. If you knock out the central office of the telephone routing the whole system goes down. If you knock out any or several parts of the web only the sector that is affected will be lost. Cisco today in its Internet routing classes favors the more centralized routing ostensibly due to the complexity of routing multiple nodes to multiple nodes. The complexity of software and computer requirement for web routing remains a challenge. Much innovation was lost in the business failure of new technology in large measure due to the intransigency of the incumbent local carriers.

A second architectural conflict comes with fiber optics. The complexity of converting electronics to photons and laser light overwhelms the traditional communication engineer, many of whom have difficulty adapting to the concept of digital. This generational gap exists in airwave communication with analog thinking as with sagging copper phone lines and the same analog viewpoint on the ground. In short, the traditional phone companies do not have the practical understanding to make the leap. Lucent was once the R&D department of the Bell system. They were innovative but were spun off years ago. It is hard to imagine the strategy unless you play golf with the posh upper management.

The Internet, in retrospect, should have been built entirely independent of the phone companies. In a sense, the missions of the two modalities are entirely incompatible. Telephone service would be better today and so would the Internet.

It seems hard to believe the role of the motion picture industry and the recording industries contributing to the logjam but they have indeed. The extended and in my view unconstitutional and monopolistic changes in copyright law has allowed them to interfere with the free flow of information on a grand scale. The copyright issues involved with free flow of information are another issue but either way interfere with the productivity of the Internet. What is worse this interference receives support from legislators who might better be looking for ways to enhance the Internet.

Much of the same problem exists with radio frequency and microwave communication. Traditional thinking defines the airwaves as property to be allocated by auction in small segments of spectrum. The reality of technology today allows quantum photons of transparent energy to bypass entirely the concept of property and transmit digital information as in clouds of either undetected and or with out interference. The new technologies come in many forms and strategies. To license one is to stop innovation. Suffice it to say RF can now be used transparently with out license.

What results from the above conflicts is information warfare and stalemate on many fronts without the public knowing what is at stake. The economy suffers. Strong administrative action is needed. The issue may indeed be of greater significance to our economy than Iraq.