OPEC 2.0: Bandwidth is the New Oil

http://www.nytimes.com/2008/07/30/opinion/30wu.html?hp

by pierrefar • 18 years ago

56 26 18 years ago

I can't upmod this enough.

The higher telco profits come at a great cost to the economy as a whole. Bandwidth is today just as important to economic growth as any other basic infrastructure.

The geographic challenge of the US is a red herring. Monopolistic laws, regulations and just plain old collusion, along with very high barriers to entry (regulations again) are responsible for the sorry state of US bandwidth.

davidw4• 18 years ago

I wasn't very impressed. Comparing bandwidth to oil seems like a silly way to start (hint: bandwidth isn't something that you have to pump out of the ground in faraway lands), even if the rest of it actually contains some good points before returning to the contrived comparison in the conclusion: "Americans are as addicted to bandwidth as they are to oil. The first step is facing the problem."

byrneseyeview• 18 years ago

It's easy to find holes in the analogy. But part of his point is that this is an easier problem to fix, because the scarcity is artificial. If we could legislate more oil into existence, that would be an easy problem to solve, too.

I'm not sure how serious an issue bandwidth really is, though. It doesn't seem to be the limiting factor in many activities.

jonmc123• 18 years ago

I think its a good analogy. Oil and bandwidth are intrinsically very similar with regards to the risk / regulation dynamic in a commercial enterprise that builds private infrastructure to the masses. Oil companies had to make large investments and take huge risks to explore, drill for oil, build a distribution system, etc. Similarly, ATT, Comcast and Vodafone had to take risks to lay down the pipes for a robust communication infrastructure. Bandwidth is not as scarce as, say, Oil, but still at any given time there is a limited amount, and an incremental cost associated with building infrastructure for more.

The problem in both scenarios is that there is an inherent conflict of interest when these bets pay off. At the point where every single member of a society relies on a particular infrastructure to maintain quality of life, it suddenly becomes more important to make certain this infrastructure is available than for the company to make a large profit.

I thought this context was implicit in the article. I think what the author is saying is, because of this dynamic, we the consumers need to be aware and take measures to protect our own self-interest as this dynamic plays out once again (so ATT does not become the cash machine that Exxon is.. at our expense). The "oil addiction" analogy sort of dumbs this down, but that's cool with me because as a result the author is reaching a larger audience that more cerebral arguments could not touch.

Xichekolas• 18 years ago

I likewise wasn't impressed. The analogy was tenuous at best, and the author made it painfully clear he didn't have a clue what he was talking about when he said:

> "A future possibility is to buy your own fiber, the way you might buy a solar panel for your home."

... and connect it to what?

I mean, what the hell was the guy thinking? A solar panel is something that sits on your house, like a TV antenna. The effect that buying your own fiber would have is about the same as buying your own natural gas lines. You can't exactly switch natural gas providers on a whim either.

Maybe I should go into business selling reporters their own fiber. I'm sure they'd go for it if I said the magic words 'Net Neutrality'. Then this author could have a nice new spool of fiber sitting in his basement, to go with the solar panel on his roof.

helveticaman• 18 years ago

How's bandwidth a non-renewable resource?

robg2• 18 years ago

I'm dealing with a satellite connection because state and local governments don't yet understand the role of IT infrastructure as an alternative to highway infrastructure. Problem is, the flow of highway tax dollars doesn't include IT either. I've seen some calculations to suggest how much oil could be saved if office workers were allowed to tele-commute one or two days a week. The debate is moving in the right direction, but this failure is a clear instance where the federal government needs to take a much more active role - just like with the Interstate Highway System.

electric• 18 years ago

This is not a very good comparison.

Oil is a finite resource. You can increase infrastructure to get more but in the end there is no more than a finite amount of oil on the planet.

'Bandwidth' on the other hand is infrastructure dependent. Increase the number and width of pipes (or tubes! :) and you increase data throughput.

jonmc123• 18 years ago

No resource is infinite. Technically, we could make more oil too. Just build some carbon lifeforms and give them the right environment for a few million years. In fact there is plenty of oil in the earth that we just can't get to because of the cost of retrieval.

The point is, once the cost of adding bandwidth exceeds the value to the market due to shortages of materials, energy, real estate, maintenance, etc you run into the same situation. Bandwidth availability has an s-curve like any other resource, and once you pass a certain threshold its just too expensive to add more pipes. It may not happen soon, but it will happen eventually. Its the same problem on a different time scale.

robg2• 18 years ago

An example of that S-curve today - my only possible "broadband" connection these days is satellite. And I'm only 100 miles from Boston.

senthil_rajasek• 18 years ago

Too many hypothetical arguments, "likely..." "almost..." "if we are not careful..." etc.,

Today, I am able to watch instructional/recreational videos at a reasonable download rate with my cable connection, I do not want to digress and go into how much I am or should be paying for it (read FREE).

Luckily, I still remember the Web 1.0 bubble days and here is an article about a company (Enron :-) ) that wanted to trade bandwidth.

http://www.internetnews.com/xSP/article.php/8_253861

Also, if I have to speak for the Internet backbone providers alone, then it is certainly not a cartel.

noonespecial• 18 years ago

This part is somewhat bogus however:

Many “owners” of spectrum either hardly use the stuff or use it in highly inefficient ways. At any given moment, more than 90 percent of the nation’s airwaves are empty.

The solution is to relax the overregulation of the airwaves and allow use of the wasted spaces. Anyone, so long as he or she complies with a few basic rules to avoid interference, could try to build a better Wi-Fi and become a broadband billionaire.

That's like saying that 90% of the sky is empty so air traffic control is not doing its job well enough. Just give everyone a pilot's license and tell them to watch out for other planes...

The empty spaces are important.

mdasen• 18 years ago

The article is just flat out wrong.

What makes oil special is that it cannot be produced. It is finite. Bandwidth can be produced. While we might be dominated by a few companies, there is nothing stopping you from raising money and building out your own fiber. Yes, it's a massive undertaking to build a fiber network, but it can be done.

With oil, we can't make more of it as demand increases. We can lay more fiber. Likewise, a country without oil can't turn itself into a country with oil while a company without fiber can make itself into a company with fiber.

While we don't have a plethora of people owning fiber, if the price ever starts going up like oil, more producers will enter and the prices will stay in check. That isn't the case with oil.

MaysonL• 18 years ago

No: bandwidth is the new Windows.

OPEC 2.0: Bandwidth is the New Oil

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