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more on Getting Universal Service to Work
From: David Farber <dave () farber net>
Date: Wed, 21 Jul 2004 14:19:30 -0400
Begin forwarded message: From: Dana Blankenhorn <danablankenhorn () mindspring com> Date: July 21, 2004 1:15:07 PM EDT To: dave () farber net Subject: Re: [IP] Getting Universal Service to Work Reply-To: Dana Blankenhorn <dana () a-clue com> http://www.corante.com/mooreslore/archives/005176.html Oram's Razor Andy Oram has a long story at O'Reilly today detailing the problems with universal service and public policy. It's a great historical overview.But it's missing one key ingredient. And it's a surprising ingredient for
Andy to miss. That ingredient is Moore's Law.Moore's Law applies to fiber, and it applies to data radios as well. Their capabilities grow faster-and-faster, faster-and-faster. It's the impact of
Moore's Law on both these areas that have blown away the financial assumptions of the telcos, and the assumptions built into the universal service debate. (Image from Hitachi.)Oram rightly criticizes conservative critics of the universal service ideal as "in no sense constructive" in their spirit. But he never really looks at just what has made these criticisms so powerful over the last several years.
That something is Moore's Law. When something holds its value as you own it, you can safely buy it overtime. If it fails to hold its value, you have to shorten the payment period. Thus 30-year home loans are a good deal for both you and your bank, but car
loans are pushing it at 5 years.The problem is that networking capacity, both the cost of moving a bit over a long distance and the cost of delivering that bit at "the last mile" of the network, is falling in value even faster than the car in your driveway. When the radios of today are more than twice as capable of handling local traffic as those of two years ago, and the technology of fiber lines show
similar improvements, you have blown a hole into any long-term financing scheme. No one, not a private company, not a municipality, not the federalgovernment, can justify building telecom capacity today on the basis of a
30-year note. Not when that capacity is going to be worthless, in real terms, just three years from now.Oram's Razor, as I call it, doesn't cut through this question. (Image from
fnal.gov.)The critics' policy prescriptions don't approach this problem, either. But,
in refusing to deal with it, they do come closer to a solution than the advocates of government. The real solution, as I've said, is to endorse full competition. Let theBells die. Let the cable operators die. Demand that any company wishing to use some of their infrastructure be able to get it, at low, low wholesale prices. The recipients can invest this money as they see fit, but they must
be made to take it. In the end the only worthwhile assets the Bells and cable operators will have are publicly-controlled -- telephone poles and electromagneticspectrum. Everything else is ripening fruit. (Image from CompUSA.) When it's
ripe treat these assets as right-of-way. The government can promise to protect it and lease it as many times as the market can bear. Let it ripen. Let it fall from the tree. But have a new crop coming in behind it, and new financial models based on Moore's Law, with newbusinesses that can provide service to everyone based on real economics, not
just fictions.Every policy prescription I see, across the political spectrum, is an excuse to subsidize either the government or incumbent duopolies. Conservatives' proposals actually violate their own ideological smell test, while liberal
solutions all smack of corruption. The only force that can hold up to Oram's Razor is Moore's Law. If itdoesn't give you the closest policy shave you've ever had, send it back for
a full refund. We think you'll be delighted. ----- Original Message ----- From: "David Farber" <dave () farber net> To: "Ip" <ip () v2 listbox com> Sent: Wednesday, July 21, 2004 11:59 AM Subject: [IP] Getting Universal Service to Work
Begin forwarded message: From: Andy Oram <andyo () oreilly com> Date: July 21, 2004 11:37:06 AM EDT To: David Farber <dave () farber net> Subject: Getting Universal Service to Work http://www.oreillynet.com/pub/wlg/5217 Getting Universal Service to Work The notion of universal service in communications has great staying power. Although the term "universal service" itself has fallen into disfavor--I'll explore why in just a minute--the commitment to the concept remains high, even in our troubled economic and politicaltimes. Just try going to the [85]Thomas legislative information siteand do a search for bills containing the word "broadband." Most ofthese bills are striving for some form of universal service, such ashigh-speed Internet in rural areas. But a parallel political universe in universal service has also arisen. A number of researchers in recent years, mostly on thepolitical right, have critiqued the long-standing ideal of providingeverybody with communications. ... ---------------------------------------------------------------------- Andy Oram O'Reilly Media email: andyo () oreilly com Editor 90 Sherman Street voice: 617-499-7479 Cambridge, MA 02140-3233 fax: 617-661-1116 USA http://www.praxagora.com/andyo/ Stories at Web site: The Bug in the Seven Modules Code the Obscure The Disconnected ---------------------------------------------------------------------- ------------------------------------- You are subscribed as danablankenhorn () mindspring com To manage your subscription, go to http://v2.listbox.com/member/?listname=ip Archives at:
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