Posts about broadband

Post-postal

Imagine an America in which everyone has an internet connection, a device to use it, and a printer.

Ruth Goldway, the chairman of the U.S. Postal Regulatory Commission, imagined such a world when the head of the U.K.’s Royal Mail International asked at an industry conference a year ago what Google would do with the Postal Service. Goldway (who hadn’t read my book) replied, “They’d give every household a computer and a printer.” (And I’d add, of course, a broadband connection.)

Goldway was just speculating. As someone who believes in the Postal Service’s universal service obligation, it makes sense that she’d wonder about universal connectivity.

Now — as is my habit — I’ll take it farther — too far — and ask: When we all are connected, do we need a Postal Service? Or what kind of Postal Service do we need? What still needs to be delivered? What are the economics of that delivery — who’s being served and who should pay? Do we still need daily (let alone Saturday) delivery? Do we need to guarantee physical delivery to every address in America? How much could we save? Can the market take over delivery of things while the net takes over delivery of information and communication? What’s the impact on publishing and advertising, on retail, on education?

These are fascinating questions I’ve been tossing back and forth with a new friend, John Callan, a high-level consultant in the delivery industry. He did read my book (and gave Goldway a copy) and came to visit me to talk about the post office in the Google age. Callan, his colleagues, and I are thinking of holding an event to explore these questions and opportunities.

The Postal Service is forecast to lose $7.8 billion in 2010. A USPS presentation here reveals the dynamics: a 17% decline in volume from ’06-’09; a forecast 37% drop in first class ’09-’20. With its universal service obligation, the USPS has to deliver to 150 million addresses a day. With its post offices, it has 36,500 retail locations, more than McDonald’s, Starbucks, Walgreens, and Wal-Mart in the U.S. combined — and it’s not allowed to close offices for economic reasons. Its retiree health benefits alone cost $5 billion a year. Dropping Saturday delivery, as has been proposed, would save $3 billion a year — but that doesn’t solve the problem. Federal Times says the USPS is “officially in a panic” (not a bad thing, I’d say) because it could lose $250 billion in a decade.

The US Postal Service as we know it is, in a word, like much of the rest of the economy disrupted (or, if you prefer, doomed). I think it’s time to ask the radical question: Do we need it?

If all of us are connected, we don’t need the USPS to deliver letters; email is precisely the reason that first class mail is already plummeting. We consumers are, in my view, subsidizing the delivery of advertising because 71% of the USPS margin available to cover its costs comes from first class, only 21% from advertising. Yet in 2009, the USPS delivered an equivalent number of ads vs letters and by 2020 it will deliver far more ads (86 billion ads vs. 53 billion letters, according to the USPS projection). Should an ad-delivery service be the province of a government-anointed entity? I don’t think so.

So let’s zero-base the Postal Services’ services: Once more, information and communication can be handled electronically. Commercial delivery should be handled commercially. There will be an increase in parcel delivery as more and more retail moves online; that’s a profitable business the market should take over. Junk mail should pay full freight — if it is still delivered once mobile becomes a better, more targeted, and more efficient delivery mechanism for coupons and such (and if do-not-mail lists threaten to cut their volume). Magazines? Sorry, but I don’t really want to subsidize their businesses — and besides, tablet triumphalists insist we’ll be using iPads before you know it. Do we need six-day-a-week delivery to every one of 150 million addresses in America then? No; delivery of things is made on an as-ordered basis. What about out-of-the-way addresses (see: Sarah Palin)? Maybe that requires some subsidy, but that would be minimal.

What about the post offices? The USPS presentation shows far lower costs if these services were run through partners (e.g., other retailers), online, and self-service machines.

What about delivery of government paperwork? Well, it’s ludicrous that we’re not given the option to fill out the census online. We are shifting our taxes online.

Mind you, I have nothing against mailmen anymore than I have anything against pressmen. It’s just that they work in antiquated industrial structures and we can find not only efficiency but improvement of service thanks to digital — if we are all connected.

That is why I wish the FCC broadband plan went farther faster (as is happening elsewhere in the world), assuring everyone a high-speed connection quickly. This examination of the Postal Service is just one example of the impact universal connectivity would have on the economy. Some of that impact is painful — lost jobs, severance cost, unused real estate, mothballed trucks. But much of that impact is positive — improved service, reduced costs, reduced environmental impact, new opportunities, new entrepreneurship, new innovation. New companies would emerge to take up the opportunities this change presents, creating new jobs and value.

That’s why I was so impressed with Chairman Goldway’s answer to the WWGD? question: Rather than trying to paddle against the flood, she was at least willing to at least wonder about going with the flow.

I’ll ask: What happens if we spend capital not on money-losing, dying institutions (repeat: $250 billion losses over a decade) but on subsidies to get every American connected? If we fully examine the opportunities that presents, it could have a profound impact on policy, budgeting, and many sectors ofsociety. Let’s model that impact on the economy.

So Callan and company and I would like to get together both incumbents and entrepreneurs to imagine the near-future world of delivery after digital ubiquity. I’d like to continue the discussion with other sectors: newspapers and media, obviously, but also education (how would it change if every child were connected and equipped?); retail; real estate (what happens when all that retail leaves its brick-and-mortar stores?); financial services (why the hell are banks still building branches?); government; and on and on. That is what should inform the policy debate over broadband policy: Let’s map out all the opportunities — for entrepreneurial innovation and growth, for savings, for improvements in life, for export value — and let that inform the resources and speed we put into universal broadband.

What do you think?

Broadband nation

I’ve been offline in a UK castle with wi-fi only in the basement (but I suppose that’s a miracle) and then in a Holiday Inn (what a fall) with gawdawful and gawdawfully expensive so-called broadband so I’ll take this opportunity while sitting in the Apple store (bless it) to just join in the chorus of celebration that Barack Obama pledged to fix our gawdawful broadband status in America. Now let’s speculate about just how ambitious we can be.

At the conference I just attended (a few posts on that later, when I can be online for more than two minutes) there was talk of trying to tax broadband providers here to subsidize (or some would say compensate) content creators. I think that’s bassackwards.

If we wanted subsidy, there could be none better than assuring that the entire nation is on broadband. Then all consumers, all content, all advertisers could meet there. It would fast-forward the inevitable. It would spark innovation and jobs and trade and education.

To hell with public-service broadcasting. How about public-service connectivity?

Disappearing divides

As sure as clockwork, whenever there is a discussion of the advances the internet and technology provide, someone will bring up the digital divide. Not sure what they expect the folks in the discussion to do about it – hold all progress until the divide is conquered? Of course, it’s the progress itself that will close the divide by creating demand and efficiency and thus scale and affordability.

Once upon a time in America, there was a literacy divide, a print divide, a radio divide, a phone divide, a TV divide, a mobile phone divide. They are all just about gone thanks to this dynamic of progress creating demand.

I have confidence that the divide will close. That said, I’m quite happy to see it hurried along. The divide I’m most concerned about now is the next one: the broadband divide. I’m hoping that President Obama’s CTO makes that job no. 1.

A question for the candidates

Here’s my question for the candidates in the CNN/YouTube Democrats’ debate:

I say I’m worried about the digital divide — between America and the world. The U.S. has fallen to 25th place in broadband penetration worldwide. Our broadband access costs, on average, 12 times more than Japan’s and 7 times more than South Koreas, yet Japan’s is 12 times faster than ours and Korea’s 9.5 times faster. So I ask the candidates: Will you pledge today to assure all Americans affordable — open — high-speed internet access and how will you do it? This is a necessity for our economy, education, culture, and future.

I’d like to thanks my bandwidth provider…

Channel Frederator, amazing cartoon podcast, announces broadband network awards.

Dangerous dolts threaten our internet

When I started reading this story about an effort to use radio bandwidth to provide ubiquitous, cheap or free (ad-supported), broadband internet access across the country, I started to get happy. But then I saw the dolts who were proposing this and the dangerous things they doing and I want to make sure they don’t get anywhere near our internet. At the end of the story, The Times reports:

M2Z plans to include a filter with the free service that would block access to “indecent” material, a definition Mr. Sachs said could be made by the government, just as it controls standards for broadcast television.

“Give us the spectrum and we’ll provide free service and we’ll live with the decency guidelines,” Mr. Sachs said.

If this post were a podcast, you’d hear an anguished and angry scream right now. Evil fools. They invite government censorship of our internet, a Trojan horse that would only lead to more censorship (insert idiotic level-playing-field argument here).

Just as idiotic, they want the government to give them that spectrum for free. Ha! Yes, let’s get ubiquitous, free, broadband internet access across America as a strategic imperative. But let’s auction that business off to the best players. And let’s require net neutrality.

So who are these fools? The Times says:

Milo Medin, chairman and chief technology officer of M2Z, which is based in Menlo Park, Calif., declined to discuss the company’s plans. Mr. Medin, a founder of the @Home Network, a high-speed Internet company that became Excite@Home and went bankrupt in 2001, started the company with John Muleta, a former head of the wireless division at the F.C.C.

@Home: The Enron of the Internet. These bozos lost billions and botched an easy opportunity to bring internet access to almost every home in the country once and now we’re supposed to give them bandwidth?

It’s worse than that. @Home tried to strongarm content providers a decade ago, telling them that if they did not make proprietary and premium deals with @Home and allow the service to cache and serve their content — and pay for the privilege — then @Home would not give them full-speed access. They were the first enemies of net neutrality. And who was the architect of this dastardly scheme? Guess.

Keep these dangerous dolts away from our Internet.