Fiber to the People, an interesting wired article by Lawrence Lessig on why we might be better off, if the information highway (wow, long time since I used that expression) would be owned by the general public, just like the offline highways and streets.
Of course, he is not arguing for a back-to-monopolies situation, but rather against the incentives that are claimed to be driving forces for former-monopolies and de-facto-monopolies.
Is - in a national economical perspective - the impact of a widely deployed, pervasively accessible and open telecommunications infrastructure not more important, than the savings on initial investment in exchange for monopolized rights to innovate?
The article argues, that the cost-saving competitive effects would all still kick in, as the market is still open as to who can actually build the network. And it is open as to who operates the network. But the owners determine who can innovate on the network. (So it boils down to who finances the initial payments, doesn't it? I'm no economist.) And if the people own the network, they can enable for innovation at the edges of the network. Look at it from the perspective of a national economy: The network infrastructure is a commodity, that many startups and big companies alike can use to innovate. The general public gets proficient with technologies and ways of thinking that other countries will lag in by years or decades.
Read the article and compare it to the situation with the mobile companies. Three companies are installing antennas all over the country. Does this competition really lead to an overall cheaper mobile network infrastructure? I doubt so. (Let the installing companies like Nokia and Siemens compete!) Do they enable innovation? Ever tried to get a two-way SMS service up and running without awkward interfaces? You will probably we stopped by steep initial investments. Ever thought that increased scale and use will make up cheaper prices? Impossible, even with prices way above the actual operating costs. The necessity of a few companies to bring in the investment in infrastructure on their own, leads to artificially high prices (compare the cost of an SMS with the operating costs caused by them) and a high barriers of entry for other participants, blocking innovations for a whole industry sector.
Imagine if the roads would be owned by maybe three companies. They would have built three highways from Bern to Zurich and to earn back the money, they would limit business use to models they can control (and throttle introduction of them to a speed they can handle). Maybe they wouldn't allow vans other than their own and would take 50% of the profit of reselling the goods 100km away? Well, at least we would get cars for 1.- CHF under the provision that we only use one of the three highways for the next two years! Sounds ridiculous, but interestingly, the same political forces that argue for investments in the public road network (instead of maybe public transport) for exactly this public economical reason, argue against drastic commoditization of the telecommunication network.
Turn the network into a commodity, and watch the sector thats stands on it grow into an international leader.
I agree with the point that there is no much sense behing 4 lines connecting to every house or something like this. But IMHO I'm not so sure, if we can put everything that easy as it seems on a first sight. Let's say that the last mile is indeed owned by the community and let's also say that it was even build by the community and involves the highest in this moment accessible technology. As we all know, the technology takes his way and there are new things coming up once in a while. Know, does a community really have the money to finance all teh possible updates of the infrastructure like a company does it (believe me please in this point, that a company is willing to update: not always and ever becaus eof competition arguments or because ot tries to hold on to a certain technology for a while, but it does upgrade). Second, does a community does have the will to upgrade every once in a while. I don't know, because the money of a community must be well spent in the eyes of the community members, so they won't easely agree in spending a lot of money in the same thing again. Who decides in which projects should be invested? there are of course a lot of intresting project for the community...
I do definitely agree with the argument, that the ownership by the community will lower the costs of teh product (here connections-costs). At the end, there must be a political process established, that supports the decision-making in what should be invested by the state and of course this implies, that the goverment changes its politics into ones of state-owned infrastructure and of supporting the companies and people with most advanced as possible infrastructures. For me, a very long walk to take in sweet home switzerland, home of the braves and the conservatives.
I agree with you, that something like that is not conceivable in Switzerland or any other european country.
As for the decison process and the necessity for a far-reaching vision there, I refer back to my analogy with the road system. This system needs much bigger upfront investments and the policitical decision process exists. On the other hand, the process is very slow as is the pace of road technology. That surely doesn't apply 1:1 to network technology, but I think that the general political process to determine the budget could be conceivable if people would make the thought in a national economical context.
Posted by: Bernhard Seefeld at November 27, 2003 12:30 AM