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Internet Neutrality2012: The Year the Internet Ends
I came across this video and pretty much thought the same thing that most of you might have thought when you read the title; "This is ridiculous"...
However, most of the points discussed in the video are credible and have merit. It is not so much that the Internet will ‘end’ but how large incumbent internet service providers are attempting to control access. This concern is well-founded and we need look no further than the FCC (in the United States) to realize that there is truth behind all of this.
The recent announcement by Sprint, Clearwire, Comcast, Time Warner, Google, and others putting up $3.2B for roll out of their touted ‘WiMax’ is directly related to their desire to squash internet neutrality.
The proof lies with the FCC’s rule changes to the ITFS spectrum (now called the Educational Broadband Spectrum (EBS)) in 2004 and the debacle that was the 700MHz auction in January 2008. The overall result of both of these processes have resulted in four large incumbent network operators and service providers vying to control two very valuable pieces of spectrum within the United States... Sprint/Clearwire in the 2.5GHz EBS (‘WiMax’) and ATT/Verizon in the 700MHz spectrum.
While the 700MHz is at least two years away from gaining market share it is the 2.5 GHz EBS ‘Wimax’ that is of immediate concern.
The best way to explain how large incumbents’ desire to control internet access could happen is to look at what is happening in our own back yard here in Delray Beach.
FAU (Florida Atlantic University) is currently in negotiations with Clearwire to lease out their VERY valuable 2.5 GHz spectrum. This asset covers ALL of Palm Beach and Broward counties populous. As a non-profit, FAU would welcome the windfall of cash offered by Clearwire, somewhere in the neighborhood of $12M upfront and around $170K per month.
This is money that will benefit FAU, their faculty, students, and constituents. That’s it. And Clearwire would control the spectrum.
Sprint Nextel and Clearwire have negotiated some 1400+ of these lease deals. All perfectly legal by FCC standards.
So let’s look at some numbers. If FAU were to build out their 2.5GHz network first, provide core access for our populous and businesses, and then lease to Clearwire the revenue model is astounding.
Palm Beach/Broward Counties
3,000,000 population, 1,400,000 households. Say core access would cost $19.95/month (5mps up/down)
15% penetration = 660,000 SUBS or a gross of $13,167,000/month
35% penetration = 1,540,000 SUBS or a gross of $30,723,000/month
etc.
Think about these monies and how this amount of income could benefit municipalities, communities, pubic safety, school systems, local businesses, health and financial services, employer outreach / distance learning & training / job creation, digital inclusion and literacy programs, not to mention FAU… the benefits are endless. All realized by simply offering core internet access. Then lease to Clearwire to provide enhanced entertainment, voice, video, gaming, communications, etc.
This above model makes sense. If we go the other route then Clearwire will provide these core services along with enhanced services and actually compete with our cities and communities to pull every dollar possible from our cities and communities. And when ATT and Verizon start in on us with their 700MHz services, the same thing will happen.
This would also put the general population in a much better position to bargain for internet neutrality.
How do we build it (funding)?
A public/private partnership. I do not know of one bank that would not finance this deal. It will take some cash but the ROI is significant enough to merit investment in this opportunity.
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