One of the big flaws in the whole telecom debate is a chronic focus on the past. The telecom companies and the FCC both tend to rely on looking backward, and by extension, it's a problem at the state level because the incumbent providers have been much better at getting their message to state legislators than purchasers of telecom services.
Here's a concrete example of what I mean. The Times-Picayune has a story today on the fast-growing "iPod Economy," which is the exploding market for iPod accessories. According to one researcher, iPod owners spend half as much as the cost of their iPod on accessories. With most iPods selling for between $200 and $300, that's a lot of money. And iPod sales itself grew 525% last year. By some estimates, iPods account for as much as 80% of the total portable audio player market.
So what's the point? The point is that very few people could have predicted this three years ago. Technology innovation is creating incredible business opportunities. If you browse through the companies selling accessories, none of them are "big name" companies, and many of them are garage start-ups, especially those that make protective sleeves and cases for the iPod.
The telecom discussion tends to be framed by what is called the "triple play," which is voice telephony, video, and (Internet) data. I've seen a lot of business cases that "prove" that communities can't recover their costs using a triple play model. I think the reports are right, but for the wrong reason (which makes them wrong overall).
It's really a quadruple play, with voice, video, data, and what I call "advanced services." Advanced services are anything that will be delivered via the Internet that we have either not thought of yet or just are not including. My favorite example is network backups. Knowledge Economy startups like Data Ensure are growing rapidly by playing in the Advanced Services arena, and Data Ensure, in particular, is creating jobs in a remote part of southwest Virginia. They just happen to be in a vertical business incubator with fiber in the basement--part of a regional fiber project.
Who could have predicted, five years ago, that the old coal town of Norton, Virginia would have world class fiber and a Knowledge Economy "advanced services" business? It's the advanced and emerging services, the fourth part of the telecom equation, that make community investments in broadband practical from a business model perspective, and sensible from an economic development perspective. If you leave that whole chunk of business out, well, yea, you end "proving" that you can get what you need from the phone or cable company.
Why are advanced services being left out? Because the phone and cable companies hate competition. They want to control what we do with broadband, and don't want third parties like Data Ensure getting some of your money. So they conveniently frame the discussion in a way that favors their arguments and weakens arguments for community investment.
Trying to jam the telecom debate into a one hundred year old model can only produce one hundred year old results--we call that the Manufacturing Economy, which is long gone.
One of the things driving the iPod Economy is broadband. Every day, thousands of iPod users are downloading "podcasts" to their iPods via a broadband connection. Podcasts, are portable talk radio. The audio equivalent of bloggers are recording commentary, posting it to their Web sites, and listeners are using RSS-enabled podcast feeds to squirt the audio files directly into their iPods. Typically, they listen to them in the car on the way to or from work. Podcasts are one of the things that are killing commercial radio as we know it. Who could have predicted podcasting two years ago?
How about your community? Are your leaders still thinking about the local economy in terms of what it was? Wouldn't it be better to think about what it could be? The first step, maybe, is to get an iPod, or at least talk to someone who has one. This is not about the music...it's about the economy, and the emerging markets being created while you read this. For all you know, you may have an iPod accessory maker in your community, selling their products over the 'net from their home. If you did have one of those companies, would you even know? I can almost guarantee those startups aren't joining the Chamber of Commerce.
And that begs another question--why not? But we'll save that for another day.