NY Times Op-Ed Misses Mark: Pain is at the pump, not with wireless!

A recent New York Times op-ed compared U.S. broadband providers to OPEC.  OPEC?!   Seriously? Tim Wu's oil cartel comparison is absurd, and is clearly based on narrow-mindedness rather than facts.

Let's just deal with the basics. OPEC, like all cartels, relies on producers agreeing to restrict output to artificially inflate prices. In contrast, U.S. broadband service providers are aggressively investing and building new capacity as prices drop and broadband speeds increase.  And how has that shown? The cost of bandwidth in the US is about 1/5th the price of what it was ten years ago, while the cost of oil is about 12 times as much as it was in 1998. So, scratch Wu's argument that consumers are getting gouged at the 'bandwidth' pump.  

Wireless carriers have paid billions to the US Treasury to buy spectrum, and billions more building better and faster networks to serve America's 260 million U.S. wireless subscribers.  In fact, according to an upcoming paper by Jeffrey Eisenach, Criterion Economics and George Mason University Law School, for the Committee for Economic Development of Australia, "in 2007, the U.S. Federal government invested a total of about $57 billion in all U.S. transportation infrastructure, including roads, bridges, ports, airline infrastructure and railroads; the Wall Street Journal reports U.S. telecom firms invested $70 billion in the telecom infrastructure alone." Private investment in communications in the US is impressive by any standard. Further, one-third of America's broadband customers use competing wireless providers to access the Internet. Mr. Wu conveniently ignores such consumer choice.

A national broadband policy is essential to our country's future, but it must be grounded in reality. It's ironic that Mr. Wu claims to oppose a command and control solution (to a non-existent problem), while supporting government-enforced mandates.  The wireless industry welcomes dialogue on how communications can be provided to all Americans, but such discussion will only be constructive and productive if everyone involved has both feet firmly on the ground, and just as sure of a grip on the facts.