The master plan for the National Information Infrastructure, as described by
Bill Clinton and Al Gore, assumes that the system will be built, owned and
operated by private companies. This has created confusion for us ordinary
folks, because we associate an "Information Superhighway" with the
Interstate freeways that are built and maintained by public agencies using
our tax dollars.
A better analogy for the NII is the American railroad system, which has
always been owned and operated by private companies. The economic structure
of railroads is that you raise some capital, go around buying up rights of
way (originally with help from the government), after which you build
tracks, buy boxcars and passenger cars, and then open for business, charging
fees for moving people and freight over your tracks. Other capitalists think
this is a good idea too, so one must be fast on one's feet, and sometimes
with a sharp elbow or two, so that your tracks go to all the right places
and get there first. When you aren't quite quick enough, you fall back on an
agreement to exchange boxcars with your competitors at meeting points on the
tracks. Over time, you even go so far as to let entire trains owned by your
competitors run over your tracks, charging them "trackage" fees.
We learned an interesting lesson in the last hundred years of railroad
history, which is that capitalists will overbuild infrastructure in their
search for profits. Since World War II, more than half of the railroad
trackage in the United States has been abandoned. A lot of railroad stock
isn't worth more than the paper it's printed on these days, but it makes
good wallpaper in a pinch.
"Well," you say, "let's make sure we don't do that with the NII. We can't
afford that kind of waste anymore." But life isn't so simple, because the
counter-example isn't attractive either. Theodore Vail, the great leader of
the Bell companies in the early part of the 20th century, saw the dilemma of
having one good company connecting everyone with telephone lines, versus
several second rate systems with patchworks of lines. In the age of Teddy
Roosevelt's Trust Busters, he knew that the government would never let him
completely monopolize the telephone business, and so he made a bargain to
bring the Bell system under government control, with guaranteed profits to
his investors. Seventy-five years later, we are dismantling that system
because of the stifling effects of monopoly regulation on innovation,
quality of service, and efficiency.
Between Scylla and Charybdis of too much capitalism and too much regulation,
what path shall the NII follow? A lot of basic decisions have already been
made. Moving digital bits over long distances at high speeds is going to be
done by a handful of competing carriers using fiber optic cables and
satellites. Much of this system is already in place, with new facilities
coming online every day. These companies, including AT&T, MCI, Sprint, and
their independent competitors, already interchange traffic, i.e., bits, at
places called "points of presence" that are scattered about the country.
However, the crystal ball turns a lot cloudier when we start deciding how to
get from these high speed "POPs" to everyone's home and business. Because
new digital technology is cheap, and getting cheaper by the day, there are
lots of potential competitors for this business. Some of them already serve
us in the form of telephone companies and cable companies. Others, such as
our electric utility companies, think that adding communications to what
they already provide would be a snap.
How much investment are we talking about? The answer, as usual, depends on
who you talk to, but estimates are in the range of $500 to $1500 per home or
business. On a nationwide basis, that adds up to between $50 billion and
$150 billion dollars. Even in these inflated times, that's serious money.
The picture is further complicated by the problem of the great transition
from analog to digital technology that confronts us. Even if everyone could
afford it, there's no point in junking hundreds of billions of dollars of
investment in analog telephones, televisions and VCRs overnight. So any game
plan for new broadband digital services has to include support for analog
devices during a transition period that will last ten or more years.
One idea that is gaining momentum and is widely supported by higher
education is a set of minimal guarantees of digital trackage rights. The
basic idea is to allow open entry into local communications services but
require all the players to permit unrestricted passage of bits, regardless
of the source or destination, subject to competitive rate schedules. This
approach is intended to broaden consumer choice by unbundling the basic
transportation system for bits from the higher level voice, video, and data
services that are required for the computer application programs in our
workstations, PCs, digital television sets, and other future information
appliances.
There are a number of thorny challenges contained in this vision of an
unbundled world of high-speed digital railroads. Having committed themselves
to open competition and vastly reduced regulation, Congress and the federal
and state telecommunications agencies still must struggle with a long list
of issues that fall within the government's obligation to enforce a "level
playing field" and common rules for the new competitors. One example is the
portability of telephone numbers, so that you and I don't have to give up
our numbers if we want to switch from one service provider to another.
Another is interface standards for exchanging bits, so that we don't end up
with a European-style system, where railroad cars still have to be jacked up
at the Russian border to change over to a different gauge track.
Those of us in the Internet community have enjoyed free trackage rights
since the beginning. Our railroads--the regional networks-- haven't even
charged each other for moving our packets, preferring a barter system based
on "you move mine, and I'll move yours." As the Internet grows and expands
far beyond the boundaries of the academic community, more sophisticated
techniques are necessary. But as we go forward, let's make sure those
trackage rights don't get lost in the switching yard.
Michael M. Roberts is vice president of Educom.
© 1995 Educom.