(audience chattering)
(audience applauding)
-: Stop, stop, stop, stop.
Thanks.
Wonderful to see you all.
Thank you so much.
Some of you may not know
this is spring break over at MIT at the moment,
so we're thrilled
that so many people are coming out for this event.
Wonderful news,
and it's gonna be a really good conversation.
This is part of a series
called MIT Conversations.
MIT Conversations brings in really fascinating speakers
from around the world,
brings them into dialogue
with people here at the MIT Media Lab.
Coming up next week,
next Wednesday, we have Yancey Strickler,
one of the three principals behind Kickstarter,
who's gonna be talking about the success
of that remarkable site
and also the general phenomenon of crowdfunding.
So that should be a really good conversation.
That's here, this space,
April 3rd, 4:30.
There's more information
on the media.mit.edu website.
But today,
we are incredibly lucky
to have Professor Susan Crawford here.
Susan has just written a really interesting book,
and I wanna make sure that I get the title right.
It's titled Captive Audience:
The Telecom Industry and Monopoly Power
in the New Gilded Age.
And what's wonderful about this book
is if you read this book,
which is a lovely, readable, enjoyable document,
you will find the answer
to one of the great mysteries of humankind,
which is why the internet in the U.S. is so bad,
so slow,
and so expensive
as compared to virtually any other nation
in the developed world.
And Susan is incredibly well qualified
to tell us this story.
She comes to us as a law professor
who's taught at some remarkable institutions,
Cardozo Law in New York City,
University of Michigan, Yale,
is now at Harvard Law School.
But beyond that,
she's been a leading figure in policy circles.
She was part of President Obama's transition team
that did an evaluation of the FCC,
the Federal Communications Commission,
a group that we'll be talking quite a lot about here.
She went on to be a special advisor
to the Obama Administration
on innovation, science, and technology policy.
She's also a very long-time defender
of The Open Internet,
former board member of ICANN,
founder of One Web Day,
a worldwide celebration of the open web.
So, a remarkable person to talk to us
about how we've ended up in such a strange
and screwed up situation with the internet
in the U.S.
The way this is gonna work
is we're gonna bring Susan to the stage in a moment.
She's gonna talk for about half an hour
about this new book
and the research and the ideas behind it.
Andy Lippman and I are gonna take the stage
and we're gonna end up in sort of a three-voice dialogue
which will very quickly
evolve, devolve,
open up into a conversation with you guys in the room
and also the web,
which will be online via Twitter
for all the folks watching us via streaming.
Full disclaimers apply on all of this.
This is all on the record.
We have bloggers throughout the audience.
It's being streamed live.
It will be up on Twitter.
The hashtag is MLTalks.
Should be an amazing conversation.
Please join me in welcoming Susan Crawford to the stage.
(audience applauding)
-: Aw, thank you (mumbles).
(feedback ringing)
Certain amount of feedback here,
but I'm hoping that's all positive.
And I love coming to the Media Lab.
This is one of my very favorite places.
You always feel like you're walking into the future
coming here.
And it's a delight to be introduced by Ethan,
one of our most talented thinkers and speakers.
Really terrific, so thank you.
(Susan exhaling deeply)
So I'm Susan Crawford,
and I wrote a book called Captive Audience,
right?
(Susan laughing)
It's the red button on the left, yeah.
Ah.
100 years ago,
electricity was a luxury in the United States
and Robert Caro has written these beautiful books
about LBJ,
and Caro really wanted to be remembered
for his description of what it was like
to be living in the hills of West Texas,
outside Austin
in the early '30s.
And he says,
it's so tender a moment,
he says, "People say
"we loved FDR,
"and we read all about his wonderful fireside chats,
"but we couldn't hear them
"because we didn't have electricity."
And it took decades of political effort,
real leadership on the part of FDR and LBJ
to spread electricity around that area.
It didn't happen by magic.
It didn't happen because of the pixie dust of the market.
It happened because of policy.
So cast your mind forward.
Let's say you're living in a suburb
out in Western Massachusetts somewhere.
Ethan's very familiar with this.
And your child needs to do his or her homework at night.
You may find yourself
parked in the parking lot of a public library,
just hoping that they left their Wi-Fi on
so that your child, sitting in the front seat,
can do homework.
There was a big article recently
in the Wall Street Journal
about kids doing their homework at McDonald's
because there wasn't a place to do it at home.
100 million Americans
don't have wired internet access at home these days.
In fact, 19 million Americans can't get internet access
where they live
because it's just not available.
Many of the 100 million Americans
who say they don't subscribe at home
say they don't because it's too expensive.
And yet, as Ethan intimated,
we're also suffering not only an internal digital divide,
but also a national divide.
It's much more expensive in America
than in many countries,
particularly in Asia,
to get a high speed internet access connection.
And none of the fastest cities in the world,
when it comes to internet connectivity,
are in the United States,
although we think of ourselves
as always being in the forefront.
America's exceptional.
We believe that about ourselves.
So even though
internet access today is essential,
is a necessary ingredient
of getting a job
or getting a great education,
getting access to healthcare,
applying for a job,
starting a new business,
we're in this hole in America
where we've got second-class service
and we're paying too much for it,
all over the United States.
Even though gas and electricity
and water are all heavily regulated
and treated like utilities in America,
for some reason,
high speed internet access is not,
and it's extremely expensive.
People are paying for their cell phone bills
and broadband access,
not giving up on that
and giving up on things like food and housing
and other parts of their lives.
So how did we get here?
So this is my contribution
to your background.
I'm sure you're aware of internet access.
You're here at the Media Lab.
What you may not know is why this happened.
So back in '96 and the early 2000s
we believed that competition
was going to protect Americans,
that the phone companies would battle it out
with the cable companies,
and that would provide low prices.
And somehow, we provide for competition,
and universal high speed internet access
would spread to everybody in America.
We believed that so strongly
that beginning in the early 2000s,
we deregulated this entire sector.
Now in the meantime,
the cable guys found that it was much cheaper
to upgrade their plant
to provide relatively quick download capacity,
high capacity,
in comparison to the phone companies,
which would have to dig up their copper lines
and replace them with fiber.
Cable can just upgrade the electronics
and have a few channels bonded together.
Fiber, a lot more expensive on the telco side.
As a result,
it's taken us 10 years to figure this out,
but cable has won.
Cable has won.
99% of new broadband subscriptions
in the last three quarters of 2012
went to the local cable monopolies.
And they really are monopolies.
On the wired side,
Comcast and Time Warner
are the giants in the field.
And long ago,
they divided up their regions
so that they don't enter each other's footprint.
It's very rational.
These are great American companies.
And it made sense for them to swap systems
and say, "You take Sacramento,
"I'll take San Francisco,
"you take Chicago."
So if you're in Philadelphia, Chicago, or Boston,
these are largely Comcast towns.
In Manhattan, where I live,
that's Time Warner Cable.
And in San Francisco, Comcast.
And at the moment,
they're facing almost no competition
on the wired side.
Verizon Fios is fantastic as a service
and would capture market share
from Comcast and Time Warner
where it's available.
But back in March 2010,
Verizon announced it wasn't going to expand
because it's so expensive to dig up
the copper wires and replace them with fiber.
So Verizon passes
or will pass, once it's done with its build-out,
no more than 18 million Americans
out of 300 million of us.
And that means that in Comcast's footprint,
which covers 50 million American households
and 45% of the American population,
they face competition from Verizon
in just 15% of that footprint.
Time Warner faces competition
in just 11% of that footprint.
Cable stands alone for wired internet access in America.
On the wireless side,
we've got what some people call
a duopoly with the fringe.
So AT&T and Verizon are the giants,
have about 2/3 of the subscribers
and 80%, 90% of the free cash flow.
So on both sides of this market,
in really two separate markets,
wired internet access and wireless,
we've got very market powerful actors
who can raise prices if they want to,
choose who to serve,
do whatever they want.
And they enjoy a quiet life,
which is one of the great benefits (chuckles)
of being in this position.
They don't wanna be in the news,
and they're not.
They're very well managed
great American companies.
Here's the story on the cable side,
just to bring this vividly to life.
This is from an FCC chart
in the National Broadband Plan
in March 2010.
It's sort of a time series moving left to right.
You can see that
for speeds we might have needed five years ago,
there was a real battle
between cable and DSL.
They're priced about the same capacity.
Moving into the center,
you can see that DSL falls away, can't keep up
with what's possible with U-verse's service,
that's AT&T's mixed DSL
plus fiber service,
fiber to the node,
and cable
still 'bout 50%, 57% cable in the middle.
But it's to the right where I'm really worried.
I'm looking in the future
for the speeds, the capacity
that Americans will need
to keep up with the rest of the world.
For more than 80% of Americans,
your only choice
will be your local cable monopolist.
And these are unregulated monopolies.
They're subject to neither competition
nor oversight at this point.
So for what the Media Lab is up to,
this seems like not such a great world
to be entering into.
Life is great for Comcast.
Average revenue per user
is steadily climbing over time.
Some people say my book
is really just a stock pick recommendation.
Buy cable.
Cable is doing really well.
John Malone, who was
the leading cable cowboy in America,
owned the TCI systems,
sold them to AT&T years ago,
exited the American market
and has gone over to Europe,
and he was quoted
just a couple of years ago
saying to investors,
"It was a huge mistake
"for me to abandon my American systems because
"cable is pretty much a monopoly now,"
he says.
Well, just last week,
Malone announced that he's coming back in.
He's gonna buy part of Charter,
which is another one of the cable actors
in America.
He sees what a great marketplace this is.
So life is good.
Here's the really telling picture
showing that we used to have this world
where you would choose
between telephone and cable,
now almost everything is going over to cable.
People are fleeing DSL.
DSL is like the,
it's like the new dial-up these days.
It's just, it can't keep up
in terms of throughput.
Here's Brian Roberts.
He's the CEO of Comcast.
And life is good.
Here he is talking to the investment community,
the people he wants to convince
of the value of Comcast back in 2011.
And he's saying in Comcast's footprint,
which covers that 50 million household spread,
39 American states,
he says, "Well, we've got about third market share right now
"for high speed internet access."
"Really think of this as an internet company,"
he's telling them.
And his hope is that they'll be 90% or 100% penetrated,
that it will be their market and their footprint
because they have just one competitor.
And that competitor is Verizon Fios.
Since he made this statement,
Verizon's now cooperating with Comcast.
The two companies entered a joint venture last year.
They're co-marketing their services.
It was like a federally blessed non-compete.
They're working together.
Comcast will sell Verizon's services,
Verizon will sell Comcast's,
and they'll develop new technologies together.
So life is even better than it was then.
He likes this position.
Of course he does.
This is great.
He's right there, right in between us
and getting online.
On the wireless side, here's our duopoly,
Verizon and AT&T.
People used to think of Verizon, AT&T as phone companies
selling lines, wires.
They still do that for segments,
especially middle mile segments
between businesses and the internet.
But more than 2/3 of Verizon's revenues now
come from the wireless side.
That's where they're making their money.
They've abandoned wires.
My mother lives here in Cambridge,
and she's had real trouble with Verizon,
getting any attention from them,
because she's still using that DSL connection.
They're not maintaining it.
It's getting worse and worse.
And Verizon actually sold off
a lot of its landlines
in the Northeast area.
And that's why they're doing even better
on the wireless side of things,
because they've dropped their wired lines.
AT&T's held on to more,
but they're mostly now on the wireless side
and no longer think of them as phone companies.
A telling chart from the investment community.
In Europe, there is competition for wireless
and average revenues are going down.
In America, steadily climbing.
It's a very good business to be in.
I'd say wireless is more competitive in America
than the wire lined side,
but only by a bit.
And a huge problem with all of this
is that Verizon is leading the way,
but all of these actors,
these enormously powerful gatekeepers
think of themselves and are arguing that they are speakers,
that they have the First Amendment rights
of the New York Times,
that they should be in a position to edit
the internet,
edit content,
provide it to us on their terms.
There's a very important case
pending in front of the D.C. circuit right now
where Verizon's making that argument
in very broad terms.
And they push this in every corner of America.
They're very successful in state houses
and on The Hill,
making this kind of argument.
So what we should do,
we're cheerful, we're resilient,
we're Americans, we're optimistic.
We know that we will figure this out.
There are a number of things we have to take care of.
One of them is to ensure
that cities can do this for themselves.
In more and more parts of America,
mayors are saying we can't let this happen.
We have to make sure that our citizens
get world class access,
the kind of fiber access that other cities,
particularly in Asia, are getting.
And they're building
or commissioning their own municipal networks.
Here's the problem.
In 19 states in America,
it's either impossible or very difficult
for cities to make this decision
because state legislation has been passed,
removing from cities the power to do this.
Most dramatically, in North Carolina just last year,
Time Warner Cable rammed through a bill
that would make it impossible for municipalities
to build their own fiber networks,
build or call for their own.
So we need to roll back those barriers.
They have to be preempted.
We have to lower
the barriers to entry for competitors,
particularly building fiber in America,
'cause right now we're stuck with a second class network.
Cable's second class.
It doesn't allow for the uploading
that fiber will or the capacity
at the moment.
We also need to make sure
that where we have networks operating in America
that they're open,
that it is possible for
retail competition to exist,
for people to attach to these networks.
We're having problems now with the completion
of rural calls.
In California, this is going to be a big scandal.
Telcos are not actually allowing calls to be completed
'cause they want to exact their pound of flesh,
their fees before they'll finish the call.
Imagine if you have an emergency
and need to reach someone and can't
because these networks are refusing to connect
to each other. So they need to be open
and they need to be connected and ubiquitous.
We need to lower the costs
or the problems involved in getting access to capital
for wired high speed internet access networks,
particularly fiber.
We're awash in capital in this country.
It needs to be,
some of it needs to be allocated
maybe through state infrastructure banks
to loans for competitors
building fiber access in cities.
That's gonna create much more energy,
much more capacity
and put pressure, finally, on these cable actors.
Right now, we don't have that system in place
and it's a tremendous problem.
Comcast, with its merger with NBCU,
is now
an actor with a built-in conflict of interest.
It's as if you were gonna take a train
and the train could decide,
well, you may wanna go visit your relatives in Cleveland,
but I think you should be going to Pittsburgh instead.
This idea of what is essentially
utility common carriage service,
getting to decide what happens
to bits flowing over its wires,
is a tremendous problem.
Comcast has that built-in conflict of interest
because most of its digital pipe
is devoted to its own video.
It needs to and wants to favor its own business plans
and will apply usage caps to online video
that won't apply to its own stuff,
thus driving people away
from potentially competitive services.
It has every opportunity and every lever to pull
to favor its own profits
rather than the spillover effects that would be created
if we all had open access
to a very fast network.
We need to fix that.
But I wrote Captive Audience,
I really wrote this just to get this on the radar screen
because right now, it's unthinkable
to talk about changing the current picture in Washington.
It's just not part of the mainstream set of ideas.
We need to reclaim the regulatory ideal.
The point is
that having oversight
over a basic thing like a telecommunications network
is a pro-growth, pro-innovation,
pro-free-market,
pro-America step.
And yet, it would unleash lots of human capital,
human productivity that right now
is being stymied by inadequate access here.
Americans just aren't aware of this.
And regulation, the word regulation
has a nasty sound to our ears.
It sounds like red tape
and difficult bureaucrats
getting in the way of expression.
It's exactly the opposite.
Exactly the opposite.
And I wanna make sure
that we just understand how bad the situation is
and elect people on the basis
of their answer to the question,
what are you gonna do about fiber access in America?
Especially people in their 20s.
I'd like to see
real energy by this generation
because my generation's basically screwed this up.
I'd like to see real attempts to ensure that
you can't get through a debate
without being asked about internet access in America,
that you can't be a successful candidate for office
without understanding this topic.
Right now, we're confused.
There are a lot of bright and shiny objects.
People say, "We're America, we must be in the lead."
But I was in Seoul, South Korea, in January
for a vacation,
and I had the unusual experience
of having my country laughed at
just because things are so slow here,
it feels like taking a rural vacation
to come to the United States.
Life is peaceful.
Connectivity is so sparse
and so expensive,
you get to be by yourself
when you come to the United States.
I didn't enjoy that very much,
and I hope that when we have this sort of
example of real fiber networks in the United States.
Google, Kansas City, might be a good example.
Seattle is working on this.
There are more than 240 places in the United States.
You can go to a great site,
muninetworks.org tells the story
of lots of cities doing this for themselves.
We didn't understand that electricity
was good for more than street lamps
until the world's fairs
that were held in the beginning of the 20th century.
We don't understand things until we see them.
And those world's fairs were sponsored
by electricity companies
who wanted people to get the idea
that electricity was a good idea.
We need that.
We need the visual of very high capacity networks in America
before we're gonna make any progress.
We also need, and I'll talk to Andy about this,
great wireless connectivity in the United States.
But you can think of wireless as an airplane
flying around,
very mobile,
great for working outside and keeping in touch.
But airplanes need runways.
They need to attach to wires.
And it's our problem in this country
that we have no policy path
to make an upgrade to fiber.
There's no direction right now
because cable is just stuck.
They've got their network.
They're harvesting.
They're making tremendous profits
and have no incentive to upgrade.
So more fiber, more wireless.
It's all one thing.
And that's what I'd like to see happen
as we get more excited about this over time.
The big picture to keep in mind
is that when you go home tonight
and you flick on an electric light,
that lovely, warm electric feeling,
look at all the warmth here,
we take that completely for granted.
We should be able to take connectivity for granted too.
It should be ubiquitous,
just part of the air we breathe,
and at a very reasonable cost, but it's not.
But getting electricity here
took a titanic political battle.
And this one's gonna take five years, probably.
Maybe shorter if all the people in the 20s
get excited about this,
maybe we can speed it up.
But we're all in this for the long haul.
So I hope you read Captive Audience.
I hope you enjoy it.
I tried to make it as accessible as possible.
It tells the story of these policy battles.
And I want you each individually
to take this problem as your own
and be joyful about it.
It's like be the happy warrior.
This is ridiculous
that we're in this situation.
We've got to change it.
So let's do that together, thank you.
(audience applauding)
My friends.
-: So, you can just sit around there, Susan.
-: Okay.
-: We're gonna start a conversation.
I'm bringing my laptop not out of my desk
for desire to finish email,
but as my way of--
-: You're in America.
You're supposed to be being left alone now.
-: Well, I am,
and in fact, you can see me leaning back in my seat here
because of the leisurely pace of our internet.
(Susan laughing)
But I would like to encourage,
'cause I've seen tweets from people in Berlin
and I think a couple of folks in Nigeria
who are watching on the livestream
following along,
so I'm gonna try to handle-- -: Oh, that's great.
-: Some of those questions as well.
But Andy, I wonder if you wanted to lead off with a--
-: I've been jotting questions.
I've got to admit, thank you for the book.
I really did enjoy it.
-: Oh, good.
-: I read the book like so long ago,
but I still remember it.
-: I remember you, too.
(Andy laughing)
-: I mean, it changed a lot of the attitude
towards what our group thinks about
and works on in a lot of ways.
But let me start with one thing
that you didn't touch on
as much in the talk as I thought was in the book,
and so I'm just curious about bringing it out.
You talked about the horizontal nature
of the wired monopoly, okay?
-: Right.
-: The notion that there's only gonna be one competitor.
Now I'll ask a different question about that in a moment,
but you mentioned,
but didn't really go into the vertical nature of it, okay?
And the nature of the fact
that if you're controlling both the content and the access,
okay, then it seems to me that what you
didn't say in so many words in the book,
but sort of hinted at
was that the future may well be
a return to AOL.
-: Yeah.
-: Where what happens is when you subscribe to a service,
you're going to a suite of prepackaged things
that are bundled along with it
without any choice on your part,
and a little escape to the internet.
Now that sort of matters
because if you think about what your internet access is
over the average month, okay,
a certain amount of it is spent
on what I call bulk bits,
watching HDTV
and Breaking Bad and Downton Abbey
and all that stuff, right?
And a lot of the rest of those bits
are sort of a completely different character of bits.
They're small, short, fast, right?
Low latency bits.
All those bits change the world, okay?
Those are the bits that brought you Amazon,
those are the bits that brought you eBay,
those are the bits that brought you the Arab Spring,
those are the bits that brought you a fluid government.
And the bulk bits,
which is this media section,
kinda watching media there,
in a sense, part of that vertical monopoly,
so far, that hasn't changed anything, right?
I mean, we still watch Downton Abbey
the same way we watched it 40 years ago, right?
We still consume media
in sort of substantially the same way.
So we've got a tail wagging the dog.
And if that future tail is kinda AOL-like,
where you've got that one-walled garden
with an escape to the rest of the universe,
where the rest of that universe is what
really unarguably changed life on earth,
that's not such a great future.
(Andy mumbling)
-: Right, and-- -: You didn't say that much
in this talk.
-: Well,
I think about the future could be presence.
Humans, the thing we want the most
is to communicate with each other,
and to have a very high bandwidth,
low latency connection that allows us to really
be with each other.
So we could be having this presentation,
I could be in San Diego, you could be here.
It wouldn't make any difference.
That is deeply desirable.
And those are some big,
those are some bulk bits
that will change the world.
It's as big a change for us
as it was to have no electricity to electricity.
The change to fiber is really a big change.
And the problem is that any competitor coming in now
to compete with the cable guys
has to enter two markets at once,
both building infrastructure
and get access to programing
for those Americans who love sports.
And so this is a little different from your story,
but I wanna tell it
that entering two markets at once is really hard.
And the fact that Comcast controls
so many regional sports networks
and so many sports rights
and can make life difficult for any competitor
coming in in fiber,
as techies, we don't like to think about sports
driving the story,
but it really does.
So when Google is building out in Kansas City,
they're finding they can't get access to local sports
at a reasonable price
because Time Warner Cable controls it.
So there are many ways to tell the story.
Vertical integration does lead us back
to an AOL-like world
where you're in a very safe walled garden
where the internet is Facebook,
two or three other things,
and you create a whole subclass of people
who see the internet as that.
That's quite possible,
and that's happening now.
There's a whole story about Facebook Zero.
Facebook's traffic gets,
I think Orange is the first company to do this,
gets rated differently from other online traffic.
And so people
who wanna pay very little for internet access
and want a very compressed internet experience
get only Facebook and send email
and that's all they're doing.
That's a bleak future for us,
especially those of us who think of the internet
as the most important idea
of our lifetime.
How could it be
that we end up with this little, tiny walled garden?
-: So Susan, you mentioned the R word
several times in this talk, regulation.
-: Mmhmm.
-: And the narrative you're giving
and you're sort of sketching the outline of
is in the world of electricity,
we had first of all, the wonderful,
trying to figure out how (mumbles).
We first had
electric companies sort of showing off
the wonders of electricity,
but then we had ferocious policy battles
over the course of decades
to get to this point.
I think there's some organization, FCC,
something along those lines, (Susan laughing)
that theoretically regulates this space.
-: Right.
-: And you're describing monopolies
at a level of concentration
that by an legal definition I've seen
are the sorts of things where regulators
are supposed to jump in and take over.
You also had the interesting experience
of helping the Obama administration
figure out where to go with the FCC.
So first, why isn't this entirely your fault?
And then second of all,
why doesn't the FCC actually seem to do anything about this
because these seem like fairly straightforward
regulatory steps to take.
They're being taken in Europe.
What's so different here?
Is there any hope that that's gonna change?
(Susan exhaling deeply)
-: The political power of the carriers
in the United States is really unmatched.
Comcast, by the way,
is bigger than Home Depot,
bigger than McDonald's,
$100 billion market cap company.
Extraordinarily well connected politically.
Verizon and AT&T are enormous contributors.
In many ways,
they're very closely linked to the government
because they're selling services through them.
So it appears from inside
a regulatory agency, like the FCC,
they're very focused on these few companies.
If they acted right now
to treat these guys like the telephone company,
which they should do,
that would be World War III.
Companies would march on The Hill,
gut the agency's budget in half, maybe less.
And then if you're leading an army
but you've lost half your army, who are you?
Very difficult.
So the reason I wrote the book
was to try to help give these guys some political cover.
It has to be that if Americans elect people
on the basis of their interest in infrastructure,
then the people on The Hill
back up the regulators when they need to act.
Now it shouldn't be like this.
You shouldn't have to wait
to serve the public interest
until somebody yells at you
that you have to serve the public interest.
But the reality is it's very difficult to act
in the current context,
or it feels difficult to act.
So--
-: So do we need to march on the FCC?
-: We need, actually,
here's my guerrilla warfare look at this,
that there will be a tipping point
as more and more mayors work on this problem
for their cities,
that local grassroots efforts to make sure
that really high quality policy's in place,
allowing for dark fiber,
wholesale basis, particularly in the cities
that are dense enough to allow for competition.
This is how Seoul did it.
You have unlit fiber in the subways
that is available to retail providers
at a reasonable cost.
And that drives all kinds of competition.
So I want mayors to do this,
and them to then be embarrassed,
the non-acting mayors to say,
"Well, why doesn't my city have this?"
And then the whole country tips over time.
I've seen enough of federal policy
to be pessimistic that it's gonna change quickly,
and I'd like to see this
grassroots effort underway.
-: Yeah, I'm nervous about that.
-: Why?
-: You know,
there's an Apple/Microsoft thing here, right?
Where like Microsoft has to make sure
that Apple stays alive
so that they're not a monopolist in the PC market, right?
That's an argument people worried about
a few years ago.
And I understand the point that we're on the road
towards a single monopoly wire line provider
of internet access,
and we can talk about wireless in a moment.
And that's probably true in the rest of the world
as well as here.
And it may be more well regulated here.
So if you get a bunch of cities like Boston
and Minneapolis and Kansas and all that kind of stuff
to put in some alternative,
that's exactly what's gonna make the monopoly last 30 years
because now, oh, it's not a monopoly, see?
There's 17 people over there in the South End
who've got internet access from somebody other than us.
Right, it seems to me you kinda need
something a little bit more massive than that, right?
-: It'll happen. -: And in 40 years--
-: Phase change. -: No one's ever made
the cable industry become a common carrier, right?
So I mean,
maybe we shouldn't just get mad,
we should get even.
(Susan chuckling)
What we really need to do
is to build a different kind of runway
and build a different alternative
so that there's a technological step that would--
-: Well, that is what I'm saying.
So I'm gonna strand those cable assets,
just let 'em go. -: Yeah.
-: Let 'em go.
Overbuild, overbuild with fiber.
It's a better network.
If the cable guys want to build that,
they'll have to do it according to an RFP
that the mayor issues.
That is a leapfrog
to eventually, a better national network.
In cities, you can float WANs and do it there.
In very rural areas,
we may have to have some subsidies.
We require interconnection across the country,
and then you've got a national network.
We've always relied on private actors
to sell us telecommunication services,
but subject to public burdens.
We're gonna do that again,
but we're gonna do it starting with cities
because it's too hard right now
to get the federal government to say
we're gonna invest in a big national network.
They did it in Australia,
but in America, it seems unthinkable
for us to do that.
-: Here's a question, actually, for both of you
coming from Twitter.
It's coming from Emory Maiden on Twitter.
And by the way, if you're watching this,
either in the audience here or on stream
and wanna get in the talk,
use the hashtag MLTalks.
I'm following it here.
Emory Maiden asks, "What can consumers do,
"especially in states where laws have been passed
"outlawing muni broadband
"to act against monopolies?"
And I'd love to hear both the solutions on this.
I'm sure you're thinking about this politically.
Andy, I'd love to hear sort of your perspective on this,
given the question that you've raised about the fear
that successful municipal networks
end up becoming a hedge against monopoly on this.
But Susan--
-: So, just to start with the political idea,
I think what we need to do is roll back
these terrible state laws.
And that requires real grassroots organizing
at the city level.
And it also is gonna require the FCC
perhaps preempting those state laws.
I'd like to see both of these things happen.
FCC right now is quite nervous about doing that.
But we can start in individual states.
There was a big victory recently in Georgia.
So in Georgia, the incumbent, Windstream,
proposed a bill that said if in your city
you're getting three megabit per second service,
like crappy wireless,
the municipality can do nothing
to make sure that a better network is built
using its own offices.
And that bill reached the house
of the Georgia House of Representatives
and was voted down.
Democrats, Republicans,
this, by the way,
is a completely bipartisan issue,
saw that the incumbent was just trying to hang on
to this marketplace
and defeated that bill.
So I think we can see more,
I'm hoping for more victories like Georgia
in the years to come.
-: It's interesting here, you see,
I think you're sort of biased because of two things
and one of them is because you're member of the bar,
and the other is you've been engaged in policy.
So your instinctive reaction is to obey the law.
See, my instinctive reaction
is in order to break these systems,
you should break the law.
-: That's what the mayor of Seoul did.
It was illegal to build that wholesale network
and he built it.
-: Well, I've always told my group
that if we're gonna do something that's gonna be
likely to get us arrested,
we gotta make sure that we don't get one of our members,
one of our students arrested 'cause that's bad.
What you have to make sure is that we're all arrested.
(Susan laughing) 'Cause if we're all arrested,
then it'll make a difference, right?
So if I, well, let me tell you a story.
There's an island off the south coast of Massachusetts,
Cuttyhunk, okay?
And there was a guy Cuttyhunk
who actually managed to get internet access, okay?
And no one else did.
And the town has about 100 people in the winter
and about 300 people in the summer.
And so what he did was he put up an access point
and let everybody use his internet access.
Well, lo and behold, that turned out to be
a violation of the terms of service
under which he had cable
'cause he was in effect reselling it.
-: Yeah.
-: Fact that he was reselling it for free doesn't matter.
It was still being redistributed.
So the internet provider kinda told him,
"No, you gotta shut down, you can't do that."
Right, well, you shut down
these 100 people on this poor little island.
I mean, all they do is they fish
and they have a school and a library.
And that didn't play well with the public.
So in effect, it worked.
And they were allowed to continue to do that.
So they broke the law.
They resold the service.
They overturned it on the basis
of sort of massive civil disobedience.
So I appreciate it.
I think political organization is always a good thing
and I'm in favor of it. (Susan chuckling)
I vote.
But at the same time,
I think that you really gotta kind of like
make demonstrable cases.
For example, if autonomous vehicles start crashing
because the data that they need
in order to drive down the road doesn't exist,
or if the stoplights stop working
and the fire trucks can't get through,
these are the real severe cases that demonstrate
why things like communications
are not just another way to watch ESPN,
but they're actually the fabric
that's tying society together,
like electricity as you said.
-: Right, and we see this in times of disaster.
So, Sandy, big disaster for New York City.
Communications were the thing that people wanted the most
and absolutely did not function.
And it turns out
that neither the FCC
nor the state public utilities commission
had any power to require Verizon and AT&T
to tell us what the outages were,
what their backup power reserves were.
The whole thing is just left to the marketplace.
And you would think that people
would be outraged about this,
but we're a hard group to get outraged.
-: Yeah. -: So I'm hoping.
-: We gotta get madder.
Can I just ask about wireless?
I mean, why when there's more than one wireless carrier,
the situation isn't better?
-: Well, two is not a very competitive market.
So these guys can divide markets pretty easily.
And the pricing is exactly the same.
They move in lockstep.
And they have enough market power
to have these shared use bucket plans
where your aunt is gonna persuade you to join the plan
so you're all feeding out of the same family thing.
They have enough market power to have
very low usage caps,
which is why Netflix use on the wired connection
is number one, it's the most popular use.
On a mobile connection,
I understand it's in the low single digits
because as soon as you start watching anything
using your handheld device,
you run into these usage caps, gets very expensive.
In a competitive marketplace,
you'd se somebody showing up
to grab that market.
These two guys, Verizon and AT&T,
have such barriers to entry
in the form of spectrum holdings.
It is much cheaper for them to build their network
than it is for T-Mobile,
1/4 as expensive.
So they've got huge scale advantages,
huge spectrum advantages.
They are just giants
in comparison to Sprint and T-Mobile.
And we don't see T-Mobile yet
pressuring prices on the wireless side.
-: So another question from the internet.
This one's coming from Mohamed Nanabhay
in Johannesburg,
who says, "I'd be interested to hear
"who you think does telecom regulation well.
"What country's a model
"that we should be following in this space?"
-: That's interesting.
Well, I think Japan has done a really good job so far.
-: And what do they do differently
than what we're doing?
-: Well, they took it seriously
as a matter of industrial policy.
This, for our citizens,
we need to make sure that everybody has
the fastest connection available
at a reasonable price.
And it takes investment by the government.
It takes a devotion to
having separated wholesale and retail networks.
Seoul, South Korea, has done a terrific job.
In the subways in Seoul,
you can watch TV on your wireless device.
New York City, the MTA
has signed an exclusive 25-year agreement
with a company called Transit Wireless,
and it's gonna provide okay wireless service
in the stations, in the stations,
not in the tunnels.
And no fiber in the tunnels,
just wireless on the station platforms.
This great media city
seems to have no path
to doing what Seoul has already done.
-: But is it making infrastructure accessible to others?
Is it breaking up large companies?
So my, I have a really weird take on all of this,
which comes from the only place
that I've tried to do telecom regulation,
is in the developing world.
-: Mmhmm.
-: And we had this sort of wonderful moment
where we said, "Geez, we've got 10,000 wired phone lines
"in all of Ghana."
And suddenly, we had this opportunity
to sort of say to the wireless provider,
we want you to do right.
-: Mmhmm.
-: And so we did our best.
We set it up, we had five competing wireless providers.
We basically said we're gonna put a carrot out there.
We want you in all 10 states of Ghana.
We want you with significant numbers
of users in rural areas.
And they jumped for the carrot
and we got wonderful rural connectivity.
We got it everywhere.
And then prices just started creeping up and up
and up and up.
And now, everybody hates the wireless providers
just as much as they hated the wire line providers.
Is there a way
to find a way to take a company,
allow it to succeed to the point
where it's pervasive,
but not end up with this horrific monopoly pricing,
that as you're pointing out,
we're facing in both these directions?
We're seeing in an African context,
we're seeing even in extremely competitive
wireless climates,
we're still seeing that incredibly difficult
upward price pressure.
(Susan exhaling deeply)
-: Takes a very firm backbone
and actually, to make this happen,
you'd have to say that there's a wholesale facility
wherever this is possible,
that's at a price regulated rate.
-: Yep.
-: It's just a reliable input.
Nobody then can underprice.
It's sitting there.
Stockholm did this really effectively.
It has a wholesale dark fiber ring.
Lots of competitors show up to connect to that.
And prices are wildly competitive.
They stay low.
If you can avoid the single wire into the house
that has no price oversight,
you can do a lot by separating out wholesale and retail
and by applying price regulation
to the wholesale part of it.
So I know this sounds a little boring,
but boy, this is blood and guts.
Chinatown is a movie really about water rights,
but involves murder and incest.
Everybody gets really interested.
I think telecom needs more movies.
And there a few documentaries like that coming out.
We need to be funny.
We need to have violent something,
a thriller
to get everybody really interested in this,
the way they were in electricity.
-: I wasn't suggesting when the group get arrested
that they get arrested for murder.
-: Okay, alright.
-: We were kinda trying to be more peaceful than that.
How do we fix the wireless situation?
And let me preface that
by saying something else,
and that is
there's two things wrong with wireless, okay?
Notwithstanding the point about how it has to
openly connect to cable.
I'm with you on that. There are two things wrong with it,
and one of them may be this kind of like lockstep duopoly
is not really much better than monopoly.
I can sorta see that every time I look to change my service.
The other is the damn wireless system we have
turns out to be the wrong one, okay?
It just turns out to be no good.
What's overwhelming wireless access right now
is kinda two things,
and one of them is streaming stuff, okay?
And you can see that when that breaks up.
But the other is lots and lots of short bits
that the apps that we run on our phones are generating,
and those bits have a tremendous overhead
for carriage in the wireless system
because they just do.
Now, no matter how you slice the cake,
the wireless system that we have in the world,
not just in the U.S., in the world,
was optimized for 1 1/2 minute phone call
and a couple of short messages every now and again.
And the traffic turns out to be exactly
the opposite of that.
It's people watching HDTV on their iPads,
and it's people running applications on their phones,
both of which are deviant traffic for that network.
Got the wrong network.
Giving more spectrum to the existing wireless carriers
stands the danger of extending your duopoly.
Giving the same spectrum to anybody,
I wanna argue,
extends the lifetime
of a fundamentally wrong-headed technology.
So we got a two-dimensional problem.
How do we fix that in wireless?
'Cause, see,
on the other side of that coin,
the average person
isn't really aware of AT&T's trouble
with Facebook keepalives.
The average person says,
"I just want it to get better."
if they wanna buy more spectrum,
that's $27 billion into the treasury
that I don't have to pay in taxes
and my phone service'll get better.
So we're speeding towards a brick wall,
and that seems to be pretty hard to move that road.
-: Well, my answer to this is more fiber, frankly.
Fiber deep into neighborhoods wherever possible,
and then more unlicensed spectrum made available
so that we can rely on just opportunistic Wi-Fi
for most of our wireless uses.
We don't even have to use the wireless carriers.
Just have opportunistic clouds of Wi-Fi hanging around.
That would do it.
And the more fiber we have, the more that we'll have.
-: So I'd love to start taking some questions from the room.
There's a mic over here.
Probably your better bet
is actually to stand by the mic,
'cause we're not gonna hear you otherwise,
and there's a livestream and such.
But feel free to line up by the mic.
We'll start taking some questions from the room as well.
In the meantime,
let me ask a question for you Susan
from Mark Bracken.
I don't know where Mark is from.
But he asks, "What about information co-ops
"modeled in part on electrical co-ops?"
-: In a sense, that's what I'm talking about
with the munis getting together.
But that was the first move in electricity too,
where serious places weren't being served.
The cooperative model makes a lot of sense here.
-: Yeah. -: You contribute assets.
You get out of it a great community resource.
It's managed in the interest of the community.
-: We have two out in Western Mass,
where I live.
We have Richmond Telephone Company,
which is a cooperative
which does phone and
what for us is speedy broadband, which is DSL,
which is as good as we get anywhere
out in Western Mass.
And that's on a co-op model.
Actually, the most interesting one
is in Southern Vermont,
where Williams College,
which is sort of our local big educational institution,
highly wired,
figured out that bandwidth is so damn cheap for them,
they could put up a satellite dish,
bounce it 10 miles up to a tower in the mountains,
and then give it to anyone
within the town of Stamford, Vermont,
who wanted to aim a dish in the right direction.
-: That's really smart.
-: So we have a town that's incredibly rural,
500 residents,
and like 400 black bear
(Susan laughing) scattered over 20 square miles
who have the best internet access
of anybody in Southern Vermont at the moment
through this sort of,
and I suspect this is violating
whatever Williams' agreements are on selling bandwidth,
but it's doing it in such a way
that it seems to have zero impact on this ability.
-: Yeah, sharing wires. -: Disobedience, man.
That's the way. (Susan chuckling)
-: So keep in mind for Andy's students,
you're allowed to disobey,
but do it all together at the same time
and don't kill anybody, (Susan laughing)
and let's go into the audience, please.
-: Yeah, thank you very much for your talk and your book.
I have used similar lines many times over the years.
However, it seems to me that
although you are using the R word,
you seem very scared to use the S word,
like subsidy.
Let's not go-- -: Oh, I'm not scared.
-: Further to the left. -: Yeah.
-: And I'm wondering if that actually moves
the agenda forward,
because right now, yes,
cable has a monopoly. -: Yeah.
-: The reality is that nobody's gonna put fiber in place
unless we find them some way
to have some return on their capital.
With every other infrastructure that we have,
roads, the government built,
electricity, utilities built.
If the internet,
if connectivity's a utility,
why are we still trying to find a way
to build it using a competitive marketplace
which is getting shorter and shorter-sighted every year?
Will we ever get past that
unless we decide that?
And I understand the difficulty of the problem,
but maybe we should try for both of them at the same time
as opposed to get one in place
and then try for the other. (laughs)
-: I appreciate the question very much, thank you.
There are different kinds of actors here
expecting different returns on capital.
Right now, we treat high speed internet access
like a first run movie.
They're getting 30%, 40% margins, incredibly rich,
and huge dividends, enormous buybacks,
one of the most valuable stocks around.
Changing the nature of what's expected
from a high speed internet access connection,
making your capital much more patient,
looking for a 10-year path,
capturing spillovers that maybe can't be counted
with numbers,
things like improved quality of life,
more businesses moving to the area,
showing that the government's costs are reduced,
all these things,
that's part of the payback for a community
that decides to do that.
So for me,
a loan guarantee coming from a community
saying we'll loan money to a private provider,
but they're gonna be a gravel pit.
They're not gonna get 40% margins.
They might get 5%
over a long period of time.
It's just a different mindset, a different model,
but it also relies on private providers
where it's possible.
Now where the private providers are totally unwilling to go,
there we've always used subsidies,
and we're gonna continue to do that.
The Universal Service Fund here in the states
is paying out $8 billion a year
for telephone service,
and is being migrated over
to high speed internet access.
It needs to go to more competitive players.
We need to have ISPs like Comcast and Time Warner
paying into that fund. We need to restructure the fund
to have more money coming in.
But I'm absolutely with you.
There are many solutions to this.
We do tend to rely on private providers,
so I want that to continue to happen.
I want them to get access to more capital,
but I want that money to be patient,
and for the prerogatives of Wall Street
not to drive how we make this upgrade as a country.
-: So please feel free to step to the mic
or line up if you have any questions on this.
I'm gonna react with sort of,
I'm often interested, so I tweet these talks,
and I'm watching what tweets get amplified.
And one that's been retweeted more than 10 times
is where you made a statement about the idea
that we treat electricity,
we treat water as utilities.
Why don't we do this with broadband?
-: Right.
-: And I think channeling my inner cable executive,
I would push back and say
you don't see a whole lot of innovation
from the electricity companies.
You certainly don't see it from the water companies.
This is the high tech sector.
This is where we create the future.
You remember a world
of the bell system,
where you couldn't attach a device to a telephone
without breaking the law
of one fashion or another.
We had a phone system
that was incredibly counter-innovation.
On the one hand,
we tend to talk about this
as a space that we want regulated
because we want it central and neutral.
But is there also the danger
that we turn this into
an incredibly sterile space
where there's no innovation occurring?
-: It's a fantastic question.
So I tend to think of this more as a road, you know?
Because we have the idea that fiber
is almost future-proof at this point,
50 to 100 years.
Photonics are being updated really rapidly.
The science is advancing very quickly.
So by just swapping out electronics,
we'll be able to update our fiber system.
But first, we have to get it in the ground.
And 80% of the cost of that is just labor.
And then there are very basic obligations
that should go with it,
interconnection, neutrality,
price regulation at the wholesale level.
Once that's in place,
the innovation then comes from what we do
with that connection.
Innovation comes from the free market operating
with information, with bits, with new applications.
We don't want highways to innovate too much.
We just want them to provide us a place
for us to drive a car.
-: I do want highways to innovate.
Like I'm not actually particularly excited
about a Google Car, our future.
That's still a crappy way
to deal with the 150 mile commute
I have across this state.
I actually do wanna see
innovation in these spaces as well.
It seems like fiber's a damn fine upgrade
over where we are now. -: Yeah.
-: But 50 to 100 years is a long time to future-proof.
When we look at something like the electricity grid
as a model for this,
electricity grid is not a particularly exciting model.
This is an extremely inflexible grid
that's subject to catastrophic failure at time
that hasn't meaningfully innovated,
that has real problems with it.
Do you worry about any of this
in the vision that you're putting forth?
-: You're blaming too many things at once there.
You're putting too many things together.
One of the things is the fiber,
and I'm all behind what you say,
but I'm not even that strict.
I don't even believe it has to be 50 years future-proof.
I think hardware is the new software.
There's lots and lots of things we can change
at very, very low cost,
and the turnover can be much, much quicker
than it has been in the past.
As I said before, a lot of the bandwidth
that people consume now
and a lot of the focus on having an internet
that's longer, lower, wider, and faster
than last year's internet
is all about adding media to it.
And that never changed society that much.
Not as much as all those other bits.
If we said, fine, 50 megabits was enough
for a certain amount of time,
and that only gives you one picture
of the Super Bowl at once,
that'd probably be good enough.
The rest of the stuff is easy turnover equipment.
The danger in the rigidity,
the equivalent of the catastrophic failure
of the electrical network
is the catastrophic failure of DNS yesterday, right?
But that's a terminal device.
That's easy to fix.
That's independent to the infrastructure.
That's not the highway.
That's just changing one of the little gas stations
along the way. -: Yeah.
-: I'm taking seriously
the airline runway notion.
And if it's incredibly expensive to put fiber in the ground,
people move.
They go to different places.
They go and so, I'm simply asking questions of
are we,
this notion, it should be a utility,
it should be neutral.
With you, 100%.
And then I'm just pushing on the analogy.
And when I push on the analogy,
there are places on it that to me,
feel like they break somewhat.
The electrical grid is incredibly well developed
in Buffalo, New York,
and it doesn't need to be nearly as well developed
as it used to need to be in Buffalo, New York,
when that was sort of the electricity capital
of the United States and was a massive metropolis.
How do you think about
building infrastructure that's sort of flexible enough
that it adapts?
And if we do end up in a situation
where we're building these sort of long-term
boring 5% a year companies,
are they the companies that actually get us to there?
I realize you think we're gonna find a way around it
with hardware, but I wonder at a certain point
if bits have to go through something,
whether those are not easily solved problems.
-: Look, for me, this is a compared to what question.
And right now, (laughs)
we're so stuck
that encouraging individual cities
to do this for themselves and experiment
seems to me like a very useful
and creative and innovative thing to do.
And watch Boulder.
Very interesting experiment there.
They got sick of their electric utility
not being adequately responsive to public concerns.
And so they've taken it back into public control.
And we'll see more of that.
Maybe if individual connectivity systems
aren't working well enough
where the people in the town, they'll take it back.
So, perfectly fine.
-: Is there another question from the floor?
(audience member speaking faintly)
Please, and feel free to introduce yourself as well.
-: I'm Rob Ivanoff.
I work in a different industry
in a sort of like financial space.
But so, I liked what you said
about certain cities being
more innovative in terms, like Kansas.
-: Right.
-: And I think that's perhaps the smart way to do it
because if you help two, three cities
to have a fiber network.
-: Right.
-: And then you'll be able to see
if people will start moving to those cities,
if the change is really worth it to them.
Because I think otherwise,
the regulation,
you're sort of starting to
kind of like go against the free market,
which is, corporations are not people,
but at the same time,
they were started by people who took risk,
stayed until five o'clock in the morning
to start businesses.
So it's kinda hard to
tell them, "Hey, you know what?
"All this work you did?
"Let somebody else enjoy it now."
So I think perhaps a smarter way is to
help these little cities
with more innovative networks
and see if people will move there
because at the same time,
it is a monopoly, but it's not,
because like I think our government
is really subsidizing, for example, housing.
So it's really telling people,
"You know what?
"Live here, don't move around."
But at the same time, we should be more movable
because competition causes us to
search for the best jobs.
So on one hand, the government is kind of like
taking the option, sort of like
forcing people to live in houses
by keeping interest rates really low
and making all this cash available.
And at the same time,
the government wants to help people with
the networks.
So I'm sort of feeling that it's a little bit,
we're kind of, on one hand, we're doing the right thing,
on the other hand, we're doing the wrong thing.
I don't know, it's just.
(Susan chuckles)
-: I appreciate your point.
So Kansas City, you can rent a room there right now
in a fiber house for $39 a month over Airbnb.
You might wanna go experience that,
see what it's like.
Kansas City's credit rating has gone up,
and in part because of its fiber plans.
Start-ups are moving there.
That's the kinda thing we love to hear.
The mayors are very excited about this.
And other cities are getting jealous.
So I think this is already happening.
I think the news for next year
is going to be these various cities
and what they're up to and we'll learn a lot.
The other report I have is two days ago,
I did a radio tour of,
I had 20 radio interviews in one day.
And you feel like you're talking to America.
There are all these different accents that come in.
And I ended up with a real Tea Partier guy
in North Carolina,
who right before he got on the phone with me,
he was railing about all kinds of social issues.
If he had any idea what I thought about them,
he never would have picked up the phone.
But then he starts talking to me,
and we make absolute common cause.
You know why?
He runs a radio station.
He can't get a fiber connection to that radio station.
He's furious.
He thinks government has a role to play
when it comes to basic infrastructure,
that he wants the free market to operate,
and I say, "I want that too."
And I say, "Eisenhower was a Republican president
"who brought us the federal highway system.
"How is it we've forgotten
"that the market doesn't magically bring
"these huge pieces of infrastructure
"that require real collective action?"
He said, "You're right!"
And he actually called back.
He wants to work with me on
a Tea Party angle on fiber for America,
which is just great,
which is exactly what I wanna see.
So it's not a right/left issue.
And we should have the political will
to do something about it.
-: So it seems like part of this
is sort of a conceptual change issue.
-: Yeah, just a mindset.
-: And so part of what's going on
for me in this conversation,
I'm following folks on Twitter around this,
we have in the back of the room,
sitting very quietly, Egghead Odewale,
who is Nigeria's tech connection
into the Cambridge community.
And so now I'm sort of following the Nigerian conversation
coming from this.
So we have a comment from Nnamdi Abana,
who is an inspirational speaker in Lagos,
who says, "I'm really surprised
"the general impression and belief
"is that anything American is top-notch."
(Susan chuckling)
And Egghead is doing his best
to sort of dissuade Mr. Abana of this notion.
But I think that's a pretty common sentiment
in the U.S. as well.
And I think a lot of people are really sort of shocked
by the statistics and such
you're sort of putting up here.
How do we get to a culture in this country
where we expect more out of our infrastructure
than we currently get?
Because by the way, it's not just bandwidth.
-: Right.
-: Our trains suck. -: Right.
-: Our airports are lousy. -: Yeah.
-: We can go into our schools,
we can go into our electric grid.
There are a lot of things about this country
that were world-leading in 1950
that are extremely disappointing at the moment.
How do we deal with this question
that you found yourself talking
with this Tea Party guy about
of how we actually end up with a world class infrastructure?
-: Well, I have great faith in millennials
because they are very locally based
and care about civic action,
and are frustrated by how poorly the country is doing.
This the time for a progressive reawakening in America
because we really have sunk
on a lot of very important metrics.
Quality of life is now gradually,
it's as if our air is being poisoned
by this poor infrastructure over time.
And we need to reclaim the regulatory ideal,
but also reclaim the idea that America
didn't get here by accident.
It's not as if just because we're Americans
we're number one.
It's because there was real leadership,
real policy determination
that thrust America to the front of the pack.
We've seemed to have forgotten that.
That's another reason why it's very important to me
that people read this book, obviously,
and think about
what our role is in the world.
We don't tend to travel.
We don't care about other countries.
So bringing some of that home to us
in the form of these new fiber neighborhoods
seems really important.
-: Whose responsibility is infrastructure, Andy?
-: I'm sorry?
-: Whose responsibility is infrastructure?
-: Responsibility where, what sense?
-: So we're asking this question about
where we look to infrastructure for,
and Susan implicitly is sort of saying yes,
we want private industry to have a role in it,
but we also want regulation within it.
We just had a question from the floor
suggesting that this a nation of innovators
and that we don't want to tie the hands of people
who work really hard, who build up infrastructures.
I know that your impression--
-: 'Kay, I understand what you're saying now.
-: Sort of disobedience.
Do we look to the government?
Do we look to technological innovation?
How do we build the infrastructure if that's the?
-: Okay, if you want my prescription,
which is basically builds on-- -: Which I just asked for.
-: Yeah, which I basically,
echoes what I sort of said before is
I'm with you 100%, okay?
Like look, at some point in our life,
we had to fix the lane width of the damn highways,
and we didn't know whether wider was better,
and we didn't know all kinds of things
and we didn't know what kinds of radius curves we needed,
and so we can't drive 250 miles an hour down the road
as they're built today, but we fixed that.
And then what we did was we viralized everything else.
The auto industry was free to do almost anything they wanted
within very few constraints. -: Right.
-: The concrete industry was free to do almost anything
it wanted within very few constraints.
So the magical thing here
is to get whatever damn infrastructure you can in
and isolate it from every other component of the system,
be it the routers, the terminal equipment,
the board or control processor,
any one of those things
because those are much easier to change.
Now if you then think about what is involved
in getting that infrastructure done,
well back in the earlier days at the laboratory,
we had a metric for how much these things cost.
And the metric was Iraqs.
The cost of putting fiber optics to every single home
in the United States is less than $600 per home.
Multiply that by 100 million homes
and you end up with 15% of an Iraq, okay?
It's just not a big number.
We're a country that made the Hoover Dam
in The Depression.
We're a country that carved Mount Rushmore.
We're a country that
transformed itself from automobiles
to building one airplane every four hours
in World War II.
That amount of money to put that fiber optics in
is not a great hurdle. -: No.
-: And the rest can evolve and will follow
and is a more appropriate place for competitive industry
to take us. -: That's right.
-: Let the record show that Andy Lippman
now advocates the U.S. invading the U.S.
Let's take one more question from the floor.
-: Let's do it!
(Susan laughing)
-: Thank you, Andy.
-: Hi, I'm Jeremy.
I'm one of Andy's students.
And I'm what I'm wondering about is
in the parallel with the spread of electricity,
there was the Wardenclyffe Tower,
which was Nikola Tesla's invention to spread electricity
without any wires at all and losslessly.
And that's a really great development,
but J. P. Morgan, who was funding it,
kinda looked at it and said, "There's no way to meter this.
"I'm not interested," and cut funding from it.
So back to the internet,
what are the sacrifices you think that
we would have to make
to the financiers of whatever network
we're going down in the future
so that they can still make money,
or what can we do avoid them
getting a power hold over us?
-: Fantastic, so that's why
I'm really interested in these very local
infrastructure banks,
maybe in each county, in each state.
They have local money skin in the game.
They loan it out very patiently.
They keep track of how these projects are going,
oversee them, are in cahoots with the mayor's office
to make sure that the dark fiber
is going the places it needs to go.
We need to get capital out in a different way
so the financiers won't control it,
won't control it,
because they would say, "Look,
"allocation of capital is something government does badly.
"I think I can make more money over here
"with these unregulated monopolies.
"Things are going really well."
That's in their interest,
and they're great Americans,
but it's not in the interest of the country as a whole.
So you need to shift your mindset
and look for money
that is available to be spent
at a very local level to fund these systems.
That's how I'd do it.
And then make sure that that's spent wisely.
By the way, the Obama administration's spending
$7.2 billion on high speed internet access infrastructure.
Program's called BTOP.
It was launched under the Stimulus Recovery Act in 2009.
We're gonna see all kinds of terrific stories
from that money
because they were very smart
about how they rolled it out.
And it's not enough to cover the entire country,
but we'll learn what investments really make sense
and what pays off in terms of social
and economic growth.
So that's gonna be good.
-: So, incredibly helpful provocations.
Wonderful to think about
the ways we might innovate around this locally,
ways in which communities might
make this attractive in the way that Kansas City has made
to try to draw an industry.
I am working on a letter
to the mayor of Pittsfield, Massachusetts, right now
based on your book. -: Great. (chuckles)
-: Wonderful thoughts from Andy on ways in which
we might both try to solve problems
either through strategic joint civic disobedience
or through bringing this to a level
where we can ask questions about
is this really something we can afford to be without?
If we can afford to be invading Iraq,
shouldn't we be capable of invading everybody's homes
and putting fiber to the door? (Susan laughing)
Wonderful ideas, as we always have on the stage here.
Let's get a round of applause for Susan Crawford.
(audience applauding) -: Thank you.
-: Thank you all for being here.
Thanks for being part of this. -: Thank you, thank you all.
-: We love having you here at MIT.
Please come for the next conversation
next Wednesday, 4:30 p.m.
Thank you, Susan. -: Thank you, Ethan.
It was real (mumbles).
(audience applauding) Thank you.