In my last post I outlined how our current system of private Internet Service Providers (ISPs) companies is economically wasteful. Although in general the private sector is better than the public sector at providing higher-quality services at a lower cost, with ISPs the product (Internet bandwidth) is a factor of 1000 times cheaper than what ISPs charge. Almost all the ISPs' operational costs come from advertising, distributing and charging for this cheap-as-dirt Internet backbone bandwidth. In other words IPSs are intrinsically so wasteful that publicly-owned networks make sense. This post is going to tackle how I think we should implement municipal data networks.
Letting Demand Drive Expansion
Internet technology changes so fast that it would be unwieldy for a council to try to have a sane policy of technology roll-out which took advantage of the latest and greatest. It would also be hard to periodically gauge the service levels residents truly want. It's much better to make technology policy future-proof, meaning that no new laws or regulations will be required to implement better technology where it's wanted as soon as it's developed.
Here's an example of a future-proof network-building scheme. Have residents pledge (with holds on their credit cards) that they would be willing to pay X dollars for Y service. As soon as a private company notices that enough residents in a neighborhood have pledged enough money to make granting the service worthwhile, they can install whatever hardware they choose which is able to meet or exceed the bandwidth demands Y of all the people who pledged X dollars. The money from the credit card holds would then go into a trust which would pay the hardware companies annuities for as long as the service works (or maybe the trust should be invested with low risk, and 25% of the total equity should be paid to the hardware builder/maintainer each year; since Internet technology becomes obsolescent so much faster than roads it makes sense to make the payment schedule accelerated).
The city would provide all of the (essentially free) backbone bandwidth in exchange for the fact that all Internet services using that bandwidth must be broadcast over authentication-free wireless Internet or users must be able to plug in wired connections for free in publicly-accessible points. (Perhaps encryption could be optional to prevent people from spying, but it shouldn't be mandatory, and passwords must not be secret. With good crypto you can have every user use a different session key, so that even if they know each others' passwords they can't snoop on each other.)
Here are a few guidelines for details of the policy which might help:
- The quality of service could be specified by three numbers: bandwidth, reliability and latency-to-backbone; that way users can communicate what's most important for them to the free market.
- Perhaps users should pay on a sliding scale, with payments tied to the quality of service received, so that there is always an explicit incentive to provide better Internet service.
- Assuming only 25% of residents who want a given service would pledge for it, maybe the city should match pledges paid out of property tax.
- Since optical fiber is cheap but expensive to lay, it's a common practice to lay cables with many more fibers than will be needed in the near future. These "dark" fibers can later be cheaply lit if needed. Policies should probably specify that some percentage (like 95%) of the fiber laid to make a network must be dark.
- Depending on political will, it might make sense to pay for city-wide phone-level coverage off the bat through taxes, and let people pledge for upgrades as desired.
In the Chicago example of last post we saw that the entire city could have a free data network for a one-time cost of under $15 per person. People are probably willing to pay a lot more for much faster connections; the plan outlined in this post shows a way in which a publicly-owned network can deliver services the public wants as soon as their feasible to deliver without wasting money on advertising and accounting.
This plan isn't anti-business either. The local companies which would spring up to supply the network services asked for by the people would have a leg up spreading to other municipalities where this same incentive policy gets implemented. (I am fairly confident that other municipalities would want to emulate the digital utopias which would come from this type of municipal Internet service.)
With some organization, the people can have cake and eat it too: they can pay a pittance in extra tax in exchange for hassle-free, state-of-the-art Internet connectivity. Everybody wins except old-school ISP shareholders. (Sell!)
*Web 2.0 couch potatoes?