I guess since everyone is linking to it, I have to. In fact, this new one from the Stanford Law School's finest is so bad, it really requires a Fisking. Let us begin.
Burlington, Vermont, is building a network. Like many municipalities across North America, it has decided to construct an advanced fiber network on its own.
If a traditional network provider owned an AFN in a particular area, that network provider, acting rationally, would charge customers a monopoly price, or restrict service to get its monopoly benefit. But if the customer owned the network, then the customer could get the same access at a much lower price and be free of use restrictions. McAdams is pushing - and Burlington and other cities are actually deploying - customer-owned AFNs.
Boeing, for example, has installed a massive AFN on its campuses. That AFN enables the company to offer itself extraordinary network capacity at extremely low cost. Technically, Boeing is the monopoly provider of network services to Boeing. But as McAdams nicely puts it (so nicely that we might call this the McAdams theorem), you don't monopolize yourself.
as more firms persuade more municipalities to develop competing high-speed networks, then we might learn again why GM doesn't own the highways, and why neither cable nor telecom companies should own IP access.
My guess is that what we will learn is that companies with good political connections will get the contracts to build these AFN's. They'll be like baseball stadiums--a great way for private interests to suck up taxpayer money and claim that it's for civic benefit.As for the example of owning highways--in fact with digital tolltaking we would be better off with private ownership. Highways would be better maintained, and traffic congestion would be better managed.
Finally, the solution to the last-mile problem isn't civic works projects. It's civil disobedience. Wireless networks using the spectrum now allocated to broadcast television would be an elegant solution. If somebody will develop the hardware, I'll help foment the rebellion.
Posted by Arnold at 6:03 PM | Email this entry | Category: telecom, FCCPublic Works in IT
Excerpt: Last week I praised Utah for deciding to construct a fiber-optic data network connecting 17 Utah cities. Arnold Kling didn't take me to task, but he denounced Larry Lessig for writing a similar -- though admittedly more thoughful -- piece...
Read the rest...
Trackback from Venturpreneur, Nov 28, 2003 1:08 AMThere are several areas which need response.
The Internet is still in the midst of geometric growth. This incredible growth is best served by the consolidation of transport technology and by the consolidation of protocols. Thus convergence toward Internet Protocol (IP) will continue. The incredible growth will be thwarted if the cost of transport also grows at a geometric rate.
So one challenge for telecommunications companies is to bring their costs down by orders of magnitude. This can be done by getting rid of multiple protocols and changing from circuit switching to packet switching - thus the move towards IP.
I do not wish the telecommunications carriers ill. Their challenge is to rebuild their networks, accomodating newer high-speed users while simultaneously not gutting their cash flow from existing customers. It is a near- impossible task, but not uncommon in the history of technology.
I work at the University of Wisconsin-Madison, where we operate the campus network, and help to operate the statewide network called WiscNet. We have gone out to bid for bandwidth the traditional way and have not achieved the desired result of orders of magnitude drops in prices by the commercial carriers. So we found and rented a piece of 'dark fiber' that runs across the state. The simple act of leasing this dark fiber has made our case for us with the carriers. We are now having non-disclosure discussions with carriers that are much more attractive.
The public vs. private ownership argument is a red herring. Private enterprise is not a panacea. Would you want Enron or Worldcom or Adelphia running your water supply or highway systems? Public ownership of finite resources does provide an incredible foundation for private enterprise. Both can co-exist.
In Illinois, the tollways are operated by the Tollway Authority, while the 'free' roads are operated by the Department of Transportation. One is not inherently better than the other. All highways need maintenance. The question is, how are the funds collected and distributed? A tollway to Watseka, Illinois would probably not generate enough revenue to pay for the toll booths.
Posted by David Devereaux-Weber on December 2, 2003 01:25 PM | Permalink to Comment
Management - a function of ownership - is IMO determinative and Lessig does not mention this word ONCE in his long article, fixating on ownership - see my long posting on this issue at LawPundit.
Posted by Andis Kaulins on December 7, 2003 08:54 PM | Permalink to Comment
"As for the example of owning highways--in fact with digital tolltaking we would be better off with private ownership. Highways would be better maintained, and traffic congestion would be better managed."
Just like the privately owned railroad rights-of-way in the U.S., compared the national railroads in most of the rest of the world, he replied sarcastically. In fact the only reason highways can be built at all in congested cities is because governments have the right of eminent domain. Otherwise a single landholder (grandma who refuses to sell her ancestral home at any price) could block any highway.
If governments issue sweetheart contracts, that's a localized problem that can be fixed by electing honest officials.
The monopoly prices that follow from permitting private companies to install sole-source infrastructures are a structural problem that can only be resolved by government regulation that destroys the very efficiency that private ownership is supposed to create.
The only economically self-regulating solution is to permit local competition, but to require unrestricted interconnectivity and interoperability.
Posted by Alton Naur on November 26, 2003 12:03 AM | Permalink to Comment