During the past weeks, continuous advertisements on television have flashed phone numbers we should call in order to stop legislation that would ensure “only” big population areas would get good cable service. These advertisements are financed by the same monopolies that have already stalled fiber optic technology in America for more than thirty years. If these special interests get their way businesses in Sweden, Japan, Hong Kong, Malaysia and many other countries will remain eons ahead of American businesses because their communication service is operating at the speed of light while our businesses are forced to wait on snail-like obsolete copper wires. For instance, a foreign citizen day trading stocks in any of the above foreign countries that already has fiber optic service can make about a hundred times more trades per day than American counterparts!
This issues’ History of Fiber Optics is taken from George Gilder’s book, TELECOSM: Regulators, politicians, and litigators always imagine that they can promote various high-minded goals, such as universal service, by offering monopoly privileges to companies for providing it. But the result, as Peter Huber and his associates show in their text, Federal Broadband Law, is mostly to promote monopoly at the expense of real universal service, which ultimately depends not on law, but on innovation. It is technological and entrepreneurial progress, impelled by deregulation and low tax rates that brings once rare products like fiber optics into the reach of the poor, who are always the world’s largest untapped market.
In the case of long distance telephony, the decline and fall of the AT&T monopoly was not chiefly an effect of politics or litigation but of technology. The millimeter waves of microwave radio effectively dissolved the long distance copper cage. It turned out you could set up microwave towers anywhere and provide long-distance services at radically lower cost without installing any new copper wires at all. Finally this recognition even reachaed the FCC and in 1971 it authorized MCI (Microwave Communications Incorporated) to compete directly with AT&T. Within less than a decade, MCI added to its panoply of aerial microwaves the yet more advanced technology of single-mode glass fibers. AT&T’s natural monopoly on long distance phone service was suddenly a thing of the past.
Today, the monopoly in long distance phone service faces a new threat from spectronics technology still more devastating than microwave and fiber threats to AT&T’s long distance empire. As with microwaves in long-distance, the government-in the name of preventing monopoly-dallied for decades before acting to allow cellular phone technology invented at Bell Labs since 1947, some 34 years passed in Washington before the FCC finally began granting licenses to use it. However, when the FCC and the courts finally permitted limited competition in wireless telephony, half the metropolitan licenses went to the new regional Bells, which had no interest in using wireless that would effectively attack their monopolies.
As a result, the idea persists that wireless and fiber optics that effectively bypass telephony are expensive supplements to the existing copper colossus rather than cheap and deadly rivals to it. The already installed base of twisted pair, copper wires still appears to many to be a barrier to entry for new competitors in the local loop, rather than what it actually is: a barrier to the entry of the regional Bells into modern communications markets.
In a global marketplace increasingly unified by light-speed telecommunications, we focus at our peril on solid states and a copper wire dinosaur protected at all levels of government.
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