As Congress struggles to put the finishing touches on its telecommunications deregulation bill, the chief result of which will be to complete the dismantling of 75 years of communications regulation, there remain some loose ends. One of the most important is how the fabled information superhighway is going to get from its major interchanges to our homes.
On the surface, the problem seems to be a straightforward engineering challenge: Connect approximately 100 million homes to a network of high-speed fiber optic links that have already been installed by private industry. The experts mostly agree that doing this with sufficient capacity to provide for two-way interactive connections for applications such as the Internet, digital television and "smart home" services will cost $500 to $1,000 per home, which translates into a national budget of $50-$100 billion. Sounds like a big number, but written off over 10 to 20 years it doesn't even compete with the typical family's budget for pet food.
Unfortunately, the apparent simplicity of this description masks a number of tricky issues. For instance, we would like all citizens to have easy and affordable access to Information Age technology. Using a computer on the Web will be as important to education and job qualification in the next century as the telephone and broadcast television have been in this century. But what about the citizens who can't afford the cost of connecting, which might be the case in 10 to 20 percent of American homes? New subsidies are politically out of favor these days. And the about-to-be deregulated communications companies don't see this as their problem either.
A second issue involves creating and maintaining an electronic highway that is open to all service providers. Nearly everyone agrees with this goal, but the system we are now deregulating has been equivalent to a series of toll roads. In return for the regulated and subsidized telephone lines into our homes, we have had the privilege of buying all the rest of our voice needs from one monopoly provider who set all the technical standards. The same situation has prevailed with the cable companies. It is not realistic to expect the fiercely competitive deregulated carriers to easily agree among themselves on technical standards that keep the digital highway open to every kind of traffic.
Some compromise of goals is needed to achieve a workable plan for the last mile that all of us can support. The original compromise, which was creation of a private but regulated monopoly telephone system, ended up satisfying neither public nor private expectations. Today we have the power of digital technology to help reshape the balance between public and private goals for a national communications system. And we have a familiar model within which new technology can be applied, the local public road system.
The true genius of the public road system is that while serving essential public needs, it simultaneously enables private commerce and personal freedom of movement. The major components of the system are the concrete highways, built and maintained as public assets; the vehicles that traverse the highways, which are in mixed private and public ownership; and the contents of the vehicles, which are goods of all kinds, but primarily commercial.
In the highway system, most of the economic value is in the vehicles and their contents, not in the concrete. . . . The same relationship will prevail in the information infrastructure. The value of the computers, their applications and the information content carried in the system will vastly exceed the few tens of billions of dollars necessary to build the "bitways" that accommodate them.
Why keep the last mile of the bitways public? I think there are several good reasons:
- Making the bitway a public asset assures that all users are treated fairly and that standards for bit transport are openly developed and provide a "level playing field" for private sector companies both large and small.
- A public bitway system allows a substantial reduction of government involvement in the overall system which would otherwise be required if each of the potential builders of private paths to our doors had to obtain regulatory approval and demonstrate that their system met public goals and was not unfair to other competitors.
- The availability of private investment for the most expensive parts of the information infrastructure, the computer applications and their electronic contents, will be increased because everyone gets to use a system engineered for the broadest base of use, thus lowering investment risks.
- A public system at the lowest layer of the infrastructure avoids wasted investment by companies vying to build multiple paths to our doorstep, and then abandoning them when an insufficient number of users materializes to pay for them.
A public road model for the last mile of the information infrastructure is still an achievable goal. Exciting experiments using this model are in progress, such as the one in Glasgow, Kentucky, where the municipal utility system is already providing broadband communications services to homes, schools, community service organizations and local businesses. We should watch them carefully for insights on how best to realize our vision.
Michael M. Roberts is vice president of Educom. [email protected]