IP: Re: Intel and Broadband Deregulation ..

[David Farber <dave () farber net>]

> Date: Thu, 1 Nov 2001 12:29:38 -0500
> To: farber () cis upenn edu
> From: Richard Jay Solomon <rsolomon () dsl cis upenn edu>
> Subject: Re: IP: Re:  Intel and Broadband Deregulation ..
>
>
> > > The genius of the Model T Ford was that it was within reach of much of 
> > > the population, and they could either buy it outright or "finance" it 
> > > based on their own personal credit.  Now personal credit has rarely been 
> > > used to finance telecom - so little that the grand pundits of telecom 
> > > cannot even think about it.  But the great thing about personal credit 
> > > is that the *investor is the customer*. That means that one does not 
> > > have to justify to the investor how the cost is going to be recovered.
> > >
> > > If you think about it, the "Henry Ford" solution is what made the PC 
> > > revolution take off.  Even
>
> Just to be historically accurate, Ford didn't come up with the financing 
> solution that created the auto boom, but Alfred Sloan of General Motors 
> did. Hence we have GMAC, but also the 2d-hand car market, which made it 
> desirable to continually upgrade your investment, and for automobiles to 
> penetrate the populace beyond the middle and upper classes. Cheap gas, 
> with the discovery of the West Texas oil fields just after WW I, didn't 
> hurt either.
>
> So, what are the parallel telecom factors to ersatz self-financing (the 
> mfr lends you the money at reasonable interest), used autos (bought back 
> and re-sold by the dealers), and gas so cheap that it becomes addictive? 
> That's going to take considerable insight and imagination. There was one 
> other factor: the incipient auto industry was hungry to expand their 
> businesses -- they weren't handmaidens of an older transport industry, 
> railroads, but were indeed rivals. The telcos today have successfully 
> killed off their rivals and have little incentive to change.
>
> Richard


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