An excellent column by Robert Cringely proposes bypassing the telcos altogether in the last mile, thereby mooting the question of “Network Neutrality” (the proposal is in the context of a discussion of Microsoft’s future).

Cringley outlines the problem:

To Bob Frankston’s way of thinking this all comes down to who owns the infrastructure. The phone and cable companies own the wire outside our homes but we own the wire inside. (It didn’t used to be that way, you know. There was a time when the phone company owned the wire in our walls even though we paid for its purchase and installation.) The Internet has been a huge success to date specifically because nobody much controls the electrons. This is as opposed to services like broadcasting where some perceived scarcity of spectrum allowed governments to determine who could give or sell us entertainment and information. The ISPs (by which I mean telcos and cable companies) would very much like to go back to that sort of system, where they, not you, are the provider and determinant of what bits are good bits and what bits are bad.

No thanks.

Cringely describes Frankston’s solution to the Telco’s anti-capitalist, anti-entrepreneurial, and anti-social tendencies:

This would be a real marketplace not a fake one. Today’s system is a fake because it depends on capturing the value of the application — communications — in the transport and that would no longer be possible because with the Internet the value is created OUTSIDE the network.

“One example of the collateral damage caused by today’s approach is the utter lack of simple wireless connectivity. Another is that we have redundant capital-intensive bit paths whose only purpose is to contain bits within billing paths,” Frankston explains. “In practice, the telcos are about nothing at all other than creating billable events. Isn’t it strange that as the costs of connectivity were going down your phone bill was increasing — at least until VoIP forced the issue.”

“We have an alternative model in the road system: The roads themselves are funded as infrastructure because the value is from having the road system as a whole, not the roads in isolation. You don’t put a meter on each driveway. Tolls, fuel taxes, fees on trucks, etc. are ways of generating money but they are indirect. Local builders add capacity; communities add capacity and large entities create interstate roads. They don’t create artificial scarcity just to increase toll revenues — at least not so blatantly.”

“I refer to today’s carrier networks as trollways because the model is inverted — the purpose of the road is to pass as many trollbooths as possible. We keep the backbone unlit to assure artificial scarcity. Worse, by trying to force us within their service model we lose the opportunity to create new value and can only choose among the services that fill their coffers — it’s hard to come up with a more effective way to minimize the value of the networks.”

A model in which the infrastructure is paid for as infrastructure — privately, locally, nationally, and internationally can create a true marketplace in which the incentives are aligned. Instead of having the strange phenomenon of carriers spending billions and then arguing that they deserve to be paid, we’d have them bidding on contracts to install and/or maintain connectivity to a marketplace that is buying capacity and making it available so value can be created without having to be captured within the network and thus taken out of the economy.

So why not do it? Well the telcos and cable companies would hate it. Who made them gods?

Thanks to Doc Searls for the link.

This entry was posted on Sunday, July 2nd, 2006 at 2:36 pm and is filed under Digital Rights / Digital Wrongs, General, Internet, Network Neutrality, Pigopoly. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.