It’s true, Brown has no concrete funded plan to bring about universal broadband, but like many, many New Labour initiatives this doesn’t matter to them. It’s all to do scoring points, trying to grab votes, and making Brown look good in the short term.

Within a week he will have moved on to the next headline grabbing iniative.

I would be grateful email gary dot taylor at my-office dot co dot uk

thanks,
Gary

I don’t think its in the public domain. Let me check and if it is I’ll send you a copy.

I don’t think you should. You cover the cost of your transport and communication infrastructure, I’ll cover mine and then nobody has any cause for complaint.

The correlation between policing levels and crime rates is so consistent over such a long period that it’s now irrefutable that policing causes crime. You’re lucky you have so few.

Mobile Operators already understand that they sell services below cost? Where can I see this McKinsey report?

Oh yes, we are. You want to live in a hell hole of a city, don’t expect me to subsidise your metro system. Or your Opera House. Or the extra policing you need, etc, etc.

I don’t get a poorer health service than you because, perhaps, you pay higher taxes.

Get that sour plum out of your mouth before commenting any more.

So, we all need, cannot live without, 2Mb/s. Except filesharers, who can be throttled down to dial-up speeds, presumably. How will they live?!

The cake is a fixed size delusion.

No, not that at all. The cake can be made smaller or bigger depending what you do. If you actually create value, it gets bigger. If you’re the government, most of what you do destroys value, making it smaller. The issue I’m discussing is whether the subsidised service is actually generating value, or just transferring it from place to place, or even destroying it.

We all pay the same taxes, we’re all entitled to the same basic facilities.

No, no you’re not. You may be “entitled” to the same amount being spent on you. In which case, you’re not entitled to a greater subsidy than anyone else. You want to live in the back of beyond, pay for somebody to run 10 miles of cable to your ramshackle shed, instead of expecting somebody else to pay for it for you.

Hmmm

Country dweller subsidise city dwellers by not taking up space in their particular hell-holes.

We all pay the same taxes, we’re all entitled to the same basic facilities.

Get used to it.

The cake is a fixed size delusion.

Interesting, isn’t it. The fact that country dwellers have roads, the buses on them, railways, telephones, electricity, sometimes gas, water, sewerage, post etc etc that are subsidised by city dwellers is thought to be an argument for forcing city dwellers to subsidise their internet connections.

I see your point, however I think the problem in the real world once we get beyond first-line economic considerations- that is, can the product sell to customers at a profit- we simply land in the unknown and nobody can make the calculation of economic benefit with any certainty, although we can certainly see that could happen in theory. So the awarding of subsidy is an impossible calculation.

I think we particularly need to consider Bastiat’s “that which is unseen”, on two levels. Firstly the obvious one that the subsidy is depressing other economic activity generally, so we would somehow have to show that the economic benefit of the e.g. railway line to the commnities serves actually outweighs the subsidy.

But there is a second issue of economic transfer- that is the economic benefit is likely to be at least partially at the expense of other economic activity in the nation directly, that is the economic benefit has simply transferred from one location to another with no net benefit at all, though one can be measured locally.

For example, if we build a railway line to a coastal destination, they attract holidaymakers. However, those holidaymakers have been transferred from other locations who suffer a loss as great as the one gained by our new line. Property prices rise in the new place, and fall in the old one, cancelling most of our net benefit.

What you need is a rope and Gordon Brown. Gordon is very good at digging himself into a hole. If you just pull him along slowly using the rope, he’ll make you a canal.

(& I almost choked on my coffee on reading that McKinsey don’t have serious telecoms specialists…)

1) I have no specific connection to McKinsey other than working alongside them occasionally in the past. I can assure you that have some very good telecoms specialists and are also plugged in to MNO’s at board level. Their report on costs of delivering data is as good as you’ll get anywhere
2) WiMAX 802.16e is a 4G technology. It is OFDMA and designed for data as opposed to 3G/3.5G which are predominantly voice technologies used for data.
3) I have seen test results of HSDPA in the field that show’s that maybe one person close to the site might get 2mbps peak rates. Move away or add another user and throughput dies. There is much discussion of where LTE will be built. Initially it was believed it would be in city centres in what are referred to as “on the pause” locations where the demand for capacity is high, as you say.

However, with the growth in 3G dongle sales some believe that many of these are for fixed line substitution and that this trend will grow. If this is the case then LTE may be needed in suburban areas as well, especially areas of high rental density for students and others who move regularly.
4) Agreed. Fibre is needed to be pushed out to the cabinet/kerb if ADSL rates are to be improved, though.
5) Indeed. When BT was first privatised and competition allowed there was a formula for new entrants to start contributing to BT’s USO obligation as soon as they reached a certain market share. (Off the top of my head it was 10%, but I am happy to be corrected on that one.)
6) LTE is an OFDMA air interface in the downlink which is specifically designed for data, it is nothing like CDMA. By evolution I was mainly referring to the fact that operators will have to roll out completely new equipment to sites. Later base station may be software upgradeable to the new standard, but this would mean taking down the existing service. In that respect MNO’s are going to have the cost of a new roll out. Albeit not as much as the 2G and 3G roll out’s.

“Let’s just remind ourselves that if infrastructure generates value, it will generate profit. If it cannot generate profit, it is creating less value than it consumes in its creation and maintenance, and is thus a net loss to the economy and thus it would be better not to have built it in the first place. Right?”

That’s probably true in the vast majority of cases, but in others, transaction costs and free rider problems can result in infrasctructure generating an economic gain but being unable to generate a profit.

Whether or not we accept that or try to address it is a separate issue.

It’s particularly troublesome when we only count the externalities we can measure. For instance, we can measure externalities of cost of alcohol- crime, criminal damage, street cleaning etc which tend to be negative. What we can’t meaningfully quantify is the pleasure and entertainment value of alcohol, the sense of community provided by a local pub, the mental illnesses that didn’t occur because lonely people had somewhere to go for company and a chat, and so on.

On both counts, our attempts to calculate will be incomplete or biased or meaningless. Even with providing internet, what are we going to count? Kay tells us that something unquantifiable called net literacy is a public good. Maybe it is. Somebody else may say the net damages community, causes porn addiction (yes, I’m totally obsessed), causes family breakdown, teenagers forming suicide clubs, playing violent video games that make us stab each other and so on. Perhaps if we could make the full calculation, we’d find the state is subsidising a collateral negative!

1) McKinsey are not telecoms industry experts (this is not a critique against McKinsey, just a statement that they are the pure definition of generalist strategy consultants, also the argument attributed to them is not false)
2) WiMAX is not (necessarily) 4G but 3G
3) HSDPA would probably do the job just nicely in rural areas in terms of capacity, the problem there being rather about the spectrum band than about the technology itself (higher spectrum bands means shorter propagation). The rationale for using LTE in highly densely populated areas is that that’s where you have capacity constraints (but not coverage)
4) Fibre doesn’t support ADSL because it’s…fibre and not copper (ADSL is a copper based delivery technology). It however supports fibre. However the fibre that is to be rolled out by BT would support ADSL as the fibre would be rolled out to exchanges from where copper would deliver to homes
5) It is more than possible to have USO without nationalising
6) LTE is an evolution of W-CDMA, further it is more than possible to use the same spectrum currently used for 3G for LTE