Pleading to Washington for broadband

[George at Orwellian.Org]

Excerpt:

#    Likening the task to the 1960s effort to put a man on the moon,
#    John Chambers, chief executive of Cisco Systems Inc., is asking
#    that the federal government commit to making broadband connections
#    available to every home by 2010.

----

http://interactive.wsj.com/articles/SB993418457489449631.htm
#    
#    Tech Industry Seeks Its Salvation         June 25, 2001
#    In High-Speed Internet Connections
#    
#    By SCOTT THURM and GLENN R. SIMPSON
#    Staff Reporters of THE WALL STREET JOURNAL
#    
#    High-tech executives think they've found a cure for the industry's 
#    deepest slump in a decade: High-speed Internet access for 
#    everyone.
#    
#    For years, telephone and cable-TV companies have been promising 
#    to build high-speed "broadband" networks, which let consumers 
#    and small businesses tap the Internet 20 or 30 times faster than 
#    conventional phone lines, yet the rollout has been slow. There's 
#    little agreement, even within the tech world, on the ground rules 
#    for building such networks, which would cost tens of billions 
#    of dollars. But suddenly the topic has rocketed to the top of 
#    the technology industry's agenda in Washington, where 
#    traditionally distant tech executives are asking for help.
#    
#    The chairmen of International Business Machines Corp., Intel 
#    Corp., Motorola Inc. and others last week met with key lawmakers 
#    and National Economic Council officials to support bills that 
#    would provide tax credits for building high-speed networks in 
#    rural areas and economically depressed inner cities. Other 
#    executives propose broader tax breaks, comparing broadband 
#    Internet links with the government-financed interstate highway 
#    or rural electric systems.
#    
#    Likening the task to the 1960s effort to put a man on the moon, 
#    John Chambers, chief executive of Cisco Systems Inc., is asking 
#    that the federal government commit to making broadband connections 
#    available to every home by 2010. A Cisco lobbyist calls the effort 
#    "our No. 1 goal" (although a spokesman says Mr. Chambers doesn't 
#    think the government would be the one to build the network).
#    
#    Some tech executives argue that extending broadband networks 
#    would help revive the national economy, because tech spending 
#    contributed such a large share of economic growth in recent years. 
#    "The stimulation would go well beyond hardware and software 
#    providers," says Phil Bond, Hewlett-Packard Co.'s top Washington 
#    lobbyist.
#    
#    But some analysts are struck by the sudden change in an industry 
#    that previously distanced itself from Washington. Technology 
#    companies "are going to Washington looking for a bailout," says 
#    Scott Cleland, chief executive of the Precursor Group, a 
#    Washington-based independent research company. "That tells you 
#    their situations are awfully bad because when times were good 
#    they were telling the government to stay away."
#    
#    Monday, more than 40 tech executives are set to meet at H-P's 
#    Palo Alto, Calif., headquarters to rally behind the broadband 
#    effort and discuss possible policy initiatives. Other tech groups 
#    have similar efforts under way. Last week's lobbying was 
#    orchestrated by the Computer Systems Policy Project, which 
#    represents big computer companies. "The administration is 
#    listening carefully to all segments of industry and working with 
#    lawmakers and regulators to assess policy alternatives to 
#    accelerate broadband deployment," a White House spokesman says.
#    
#    The renewed push for broadband stems from widespread disappoi
#    ntment with the Telecommunications Act of 1996, which was supposed 
#    to encourage competition, particularly for local phone service. 
#    But many of the upstarts that challenged the Baby Bells couldn't 
#    make profits and got hurt in the collapse of the high-tech bubble. 
#    And companies that built data networks to carry an expected flood 
#    of Internet traffic are starving for business.
#    
#    Tech executives fear that broadband deployment will slow even 
#    further. A year ago, the pace was a secondary concern for big 
#    tech companies. Then the dot-com bubble burst. Companies cut 
#    their purchases of tech gear, and executives of tech companies 
#    faced declining sales, losses and layoffs. Now, potential sales 
#    resulting from a new wave of high-speed Internet connections 
#    look like a port in a storm.
#    
#    When Mr. Chambers broached the subject before 50 executives at 
#    a February meeting of TechNet, an industry lobbying group, 20 
#    hands shot up, according to a person who was in the room. TechNet 
#    quickly assembled a "working group" on broadband policy, including 
#    Mr. Chambers and executives from Intel, Microsoft Corp., 3Com 
#    Corp. and ExciteAtHome Corp. Its recommendations are expected 
#    in September.
#    
#    Executives hope ubiquitous high-speed links can ignite another 
#    "virtuous cycle" of innovation and spending on tech gear, like 
#    the one that accompanied the first phase of the Internet in the 
#    late 1990s. Telecom-gear makers would sell equipment to build 
#    the networks. PC- and chip-makers would sell consumers new 
#    computers to keep up with faster connections. Software makers 
#    and content creators would update programs. "We're convinced 
#    now more than ever that broadband is crucial to our industry," 
#    says Peter Pitsch, an attorney in Intel's Washington office.
#    
#    A unified tech industry could be influential in the national 
#    debate. "I've always felt the computer folks would tip the balance 
#    if they ever came into the thing in a serious way," says Jeffrey 
#    Eisenach, president of the nonprofit Progress and Freedom 
#    Foundation, a group backed by the Bell phone companies that is 
#    sponsoring the meeting at H-P.
#    
#    But there's little agreement in the industry about how to get 
#    the job done. The differences are apparent on the central 
#    telecommunications question facing Congress this year: whether 
#    to relax 1996 rules limiting the role of Bells in building and 
#    operating data networks. Until recently, big tech companies were 
#    reluctant to take sides because they had customers in rival camps. 
#    Now, their reluctance may be fading.
#    
#    In a speech last week, Intel Chairman Andrew Grove endorsed 
#    loosening some of the restrictions. That was a bit of a shift 
#    for the chip giant, which had invested in several Baby Bell 
#    challengers in the heady days after the 1996 law was passed.
#    
#    "If we want to see broadband, we have to follow the money, as 
#    cruel and unfair as it sounds," said Mr. Grove, who lunched with 
#    Ivan Seidenberg, chief executive of Baby Bell Verizon 
#    Communications Inc., the following day. Mr. Grove called for 
#    "a new approach" in which the Bells "should be allowed to invest 
#    with the fair expectation of making a lot of money."
#    
#    Others blame the Bells for stifling competition, then dragging 
#    their feet. "I'm afraid if we leave it to existing incumbents, 
#    the speed at which broadband will progress would not be 
#    satisfactory," says 3Com Chairman Eric Benhamou. He suggests 
#    government-subsidized loans, or tax rebates for signing up 
#    broadband customers. Most tech lobbyists, though, consider it 
#    politically toxic to mention those ideas.