more on why should we ever trust corporation -- BP Named in Inquiry on Pricing - New York Times

[David Farber <dave () farber net>]

Begin forwarded message:

From: "Faulhaber, Gerald" <faulhabe () wharton upenn edu>
Date: July 2, 2006 10:59:25 PM EDT
To: "Robert J. Berger" <rberger () ibd com>
Cc: Dewayne Hendricks <dewayne () warpspeed com>, David Farber  
<dave () farber net>
Subject: RE: [IP] more on why should we ever trust corporation -- BP  
Named in Inquiry on Pricing - New York Times

Dark fiber as infrastructure; interesting.  Is lighting it a business?

My concerns about munis getting into this (or indeed any) business is  
that they absolutely will use their power over licenses, franchises,  
rights of way, etc. to block new entry/technology that they see as a  
threat to their own business (i.e., BB conduit).  If we could pass a  
law saying "can't pass laws forbidding munis into Internet", I would  
go along only if we passed a law saying "munis cannot use their  
powers to behave anticompetitively."  But try as I might, I can't  
write such a law that clever mayors can't easily get around.  My fear  
is these guys get in on some technology (like wifi) and then when  
firms enter the city to offer fiber the city sees it as a threat to  
their (wifi) system and refuses to grant the fiber guys right of way  
to lay their fiber.  In fact, cities are notorious for doing stuff  
exactly like this, and most folks don't even notice.

Incidentally, there is an interesting paper by Sappington and Sidak  
(forget where) that shows gov'ts that enter markets behave more  
anticompetitively than private firms.  Maybe not what you want to  
hear, but think about it.  Mayors are only human, too.

Professor Gerald Faulhaber
Business and Public Policy Dept.
Wharton School, University of Pennsylvania
Philadelphia, PA 19104
Professor of Law
University of Pennsylvania


From: Robert J. Berger [mailto:rberger () ibd com]
Sent: Sunday, July 02, 2006 5:43 PM
To: Faulhaber, Gerald
Cc: Dewayne Hendricks; David Farber
Subject: Re: [IP] more on why should we ever trust corporation -- BP  
Named in Inquiry on Pricing - New York Times

What I am proposing is that the Government WOULD NOT LIGHT the fiber,  
so there are no electronics or active optical components as part of  
the Municipal build. I am not attached to that outcome, but I think  
that is what would overcome the concern you mention. I don't think  
Municipalities are up to running (or dealing with the 5 year  
lifetimes) of the optics/electronics. But their "Men in Trucks" can  
deal with the ongoing maintenance of the conduit, utility poles and  
dark fiber.

Lighting the fiber would be the job of some commercial or other  
entity that could do that as a business or as part of another  
business (bundling the lighting of the fiber with higher layer services)

The point is that there can be no monopoly on lighting the fiber. The  
fiber is available to anyone who wants to lease it at a cost + basis  
on a per run basis.

I'm still wondering if you (and all the other folks on ether side of  
the Net Neutrality dispute) are willing to state for the record that  
there should be no laws barring municipalities or other entities from  
competing with the incumbents.

Also, is there a document that was written BEFORE the building of the  
Interstate Highway System with all the numbers: benefits, costs,  
investments, etc? Can't we just say its for our National Security :-)



On Jul 2, 2006, at 2:02 PM, Faulhaber, Gerald wrote:

> I think we are pretty close on this subject.  I do (and did)  
> understand your point about layer 1 only, just like highways.   
> However, I have two points re: screwing up.  (i) the Interstate  
> system is in need of constant repairs and in many areas these are  
> being neglected.  If rats start eating into the fiber cable (and  
> they do) it'll need to be fixed.  (ii) Unlike highways, the fiber  
> infrastructure will have to be upgraded to stay even reasonably  
> current with advancing technology, principally new optical  
> electronics  (I forget the fancy technical name for this).  I think  
> this is the biggest concern I have about gov't providing this  
> infrastructure; if it were a static technology like highways, it  
> could very well work.  In this case, I really worry.
>
> There may be a public business case for building such an  
> infrastructure (assuming all these problems can be solved), just  
> like there was for the Interstate system, but it is a much  
> different case.  I would like to see somebody make this case  
> carefully, with all the numbers: benefits, costs, investments,  
> etc.  I am not a fan of "if you build it they will come."

––––––––––––––––––––––––––––––
Robert J. Berger - Internet Bandwidth Development, LLC.
Voice: 408-882-4755 eFax: +1-408-490-2868
http://www.ibd.com




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