Lafayette, like Philadelphia and some other municipalities are
proposing to built out their own Internet access systems and have
been facing tough opposition from the telephone and cable
companies. But these cities are in the minority. Although access to
the Web is vital to the social and economic wellbeing of a society
it is being left mainly to the purely economic considerations of
monopolistic conveyors, who in the case of Web access in the US, are
the giant Telcos and Cable Operators.
Mark Cooper, one of the panelists, provided the following context
by reminding the audience (the event was webcast) of how far back
the principal of fair access has been embedded in the law.
Innkeepers in pre-Renaissance Europe at the very dawn of Capitalism
were required, in some of the first instances of common law, to
publicly post their tariffs. In such way, for example, the pilgrims
in the Canterbury Tales could all be assured the same price for
equal bed and board regardless of their station in life. Cooper also
pointed to rules requiring canal operators in early America and
later the railroads that required them to post their tariffs and
make them an equal playing field for transport or trade. It was well
understood, that if these regulations were not in place, the
monopoly operators of roads, canals and railroads could charge
favorites one price and non-preferreds another thereby tipping the
competitive balance.
As the F2C website
argues in its call for the Conference:
The need to communicate is primary, like the need to breathe,
eat, sleep, reproduce, socialize and learn. Better connections
make for better communication. Better connections drive economic
growth through better access to suppliers, customers and ideas.
Better connections provide for development and testing of ideas
in science and the arts. Better connections improve the quality
of everyday life. Better connections build stronger democracies.
Strong democracies build strong networks.
Place: By happenstance or not, on Tuesday of this week the
Supreme Court heard two cases --MGM
v.Grokster and
Brand
X (Brand X (a California ISP) vs FCC)
with the potential of having enormous impacts on the future of
technology. In the first case, the judges were being asked to look
at whether technologies that can be used for illegal purposes can be
banned even if they also have legitimate uses. In the Brand X
case, the Court will decide whether the Cable Companies, like the
Telcos have to open up access to their lines into the house to other
potential service providers like ISP's. Later in the year,
Congress will be working on a possible update to the
Telecommunications Act, which is widely viewed as flawed. For the
last decade the role of the FCC, a group of 5 Commissioners, which
once had the fairly sleepy job of regulating a stagnant network
system has become a critical battlefield for a multitude of issues.
The Brand X Case, for example, is the direct result of an FCC ruling that said that the
Cable Companies were not required to share their lines, a decision
that was later overturned by the 9th District Federal Court of
Appeals.
And so, against this background, on Wednesday, the F2C Conference opened in the AFI Silver
Theatre outside of Washington. Expert speakers like Susan Crawford,
Jim Baller, Robert Corn-Revere, John Perry Barlow, Rahul Tongia and
Dan Gillmor, to name just a few, talked about First Amendment speech
and press issues; alternative network build-out approaches; the need
for a neutral, private, transparent, fully accessible network;
societal access implications; and potential technology solutions.
What couldn't have been made more eminently clear to all who
attended in person or via the webcast, was`that the
consequences of choices in future directions for the Web are far too
important to be left to the politicians and lobbyists to sort out on
their own. If they are left to do that, without the direct input and
actions of all of us most directly affected, it's highly likely that
this dynamic moment in communication history will become
something looked back at in nostalgia or anger for what might have been.
So what's going on around here? Let's start by calling it the dollar hot potato game and it's being played all over Asia. John Mauldin in a piece called Why Trade Imbalances Really Do Matterr compared it to playing the card game Old Maid. In Old Maid, if you remember, the idea is to get rid of the Queen of Spades. In each round the players pull a card from the hand of the player on their left. Pairs are discarded as the hand is narrowed down but there is no other black queen to match the old maid.
The Asian central banks hold several trillion dollars in their coffers. Since 1992 those dollars have lost more than 35% of their value in world markets. But these same Asian countries' economies are dependent on selling goods to the US. In some ways it's not the bloated old maid they're holding but the goose that laid the golden egg. The problem is that egg is getting less golden every day the dollar sinks against the value of the euro and, more literally, gold. The old maid analogy works because it becomes something of a nightmare for the central bankers in Asia to lose value on a day to day basis as the US trade imbalance widens. Nobody wants to end up holding all the dollars but at the same time nobody wants to be seen as sloughing off the queen.
This leads us back to today's news that once again, for the umpteenth time the US trade balance for a single month --January 2005) has hit close to a new record high. This time the deficit was 58.3 billion dollars. On an annual basis this would be close to $700 billion. What should be ringing warning bells is that this trade imbalance occurred after years of US dollar devaluations. Normally, when you devalue your currency it makes foreign goods more expensive and your own goods cheaper vis a vis the rest of the world. Over time that's supposed to bring the deficits down and a country's trade back into equilibrium with the rest of the world.
So as long term interest rates finally (we say, finally not because we want them to move but because as the dollar falls US Treasuries will get harder to sell to those sleepless Asian bankers we talked about and they will demand higher rates of return) start to move up and mortgage rates start to follow, the housing well will dry up leaving a lot of debtors holding an empty bucket.
Of course trade deficits and budget deficits haven't mattered much up to now nor has rising consumer debt --and BTW, it too was way up in January-- so perhaps they won't matter going forward. No one can say. Perhaps we in the US can just go on borrowing and spending forever. After all, the US is the world's strongest economy. As Treasury Secretary Snow said today, when faced with the trade figures, it's the rest of the world that's not pulling its weight.
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