Technology Futures

A fight is brewing in Congress over COPE, a new telecom bill that seeks to create national franchise agreements for video. As the phone companies try to get into the video services marketplace, they are at a severe disadvantage--the cable companies have had decades to negotiate local cable TV franchises. For every community the phone companies want to approach with video, they have to negotiate a franchise, which can take six months to a year.

If you don't think about it very much, a national franchise seems to make sense; we all want more competition in the telecom marketplace, and so one way to achieve that is to reduce the amount of legal paperwork needed. But there are so many things wrong with this bill, on both sides, that it is hard to list them all. But I'll try:

• Franchises as we know them are dead. The problem I have with cable franchises is that they have never had much of a direct relationship between the real cost of managing community right of way and what the companies are charged. This is problematic. Companies that use community infrastructure like right of way should pay for that privilege, but the franchise fee needs to be tied to real costs, not just "we'd like some money, so please tax your customers on our behalf."
• The Internet has severed the connection between infrastructure and service, so why are we even talking about this? A company in California (e.g. Disney) can sell video programming (known as "TV") to me in Virginia without ever having a physical presence in the state. So why should some companies pay and other get away scot free? This is also known as the "satellite TV provider argument."
• Some opponents of COPE oppose it because it may cause funding problems for community television. And it may, because franchise fees have often been used to fund community television. But if community television is a good thing, it is a good thing whether or not franchise fees are there to support it. Expecting one or a few companies to collect taxes for the community television station but not others is a bad strategy.
• Trying to preserve old, analog-based community television is just as wrong as trying to preserve old, pre-deregulation franchise fees. Community television is poised for a renaissance (expanded programming, more variety, more viewers) if it makes the jump to broadband, but that means letting go of the old, broadcast/cable TV distribution model.

Part of the confusion about all this is a stubborn refusal by Congress and state legislators to have an honest and informed discussion about the rights of communities to determine their own economic destiny. Telecom companies that want to use community right of way should pay the true cost of that service, so in that sense, I support franchise fees vigorously (but I think we need a new name for them).

But legislators often look for simplistic solutions to complex problems, or inversely cook up complex solutions to simple problems. There is a little of both going on here, and communities are being left out. National franchising will inevitably lead to national franchise fees, with a single check written to the Feds, rather than the community. This is bad, bad, bad. Communities will be forced by the Feds to provide right of way access but will likely see very little of the franchise fee. And we'll have a new Federal bureacracy--the Federal Bureau of Community Right of Way.

Communities have to start today, build their own infrastructure, manage their own right of way, and take control before all is lost. Communities without a right of way and franchise fee strategy will be the biggest losers.

A founder of Greenpeace has endorsed nuclear power generation (registration required). The China Syndrome fears of environmentalists have never come to pass. The much cited Three Mile Island failure in fact showed that U.S. reactor designs work--the radioactivity remained within the containment dome. More people die every year from mining coal than have ever died from a nuclear reactor problem.

Nuclear power is just one of a toolkit of new power generation systems, large and small, that we will see emerge over the next ten to twenty years as we begin to wean ourselves off oil. Gas at three dollars a gallon hurts too much not to take a common sense look at other power generation technologies.

This is progress, and as I have said all along, the emerging Energy Economy is going to be big.

Chicago area small businesses are hurt by the lack of broadband. But that is a story that applies to small businesses everywhere in the U.S., but rural businesses suffer the most.

In rural areas, the longer distances make it more difficult for incumbent phone companies to justify the investment, but the need is still there. I was at a county council meeting last week in a community working to develop a broadband master plan for the county, and the incumbent phone company used the same tired arguments against the community effort.

The phone company representative said that it was too expensive to do. This is patent nonsense. It may be more expensive, but it is not "too expensive." We need only look at the existing telephone and electric lines to virtually every rural home and business in the country--mostly provided by well-run and profitable coop ventures. Common sense alone suggests that if we have already run two cables to rural homes and businesses, we can certainly do so again.

What we need are honest phone and cable companies that are willing to say, "Okay, we understand the market has changed. We'll work with any local community that builds an open access infrastructure. This will lower our costs and expand our potential market. And we understand we will have to compete."

That would be honest and forthright, and companies that would embrace an open access communitywide network would, I am convinced, make more money than they are now. Why? Because they would have access to more customers at lower cost, and could offer a wider variety of advanced services.

But it requires corporate honesty first to prosper in that kind of environment. In the meantime, communities and community leaders can't just sit by and watch their local businesses wither away because basic infrastructure is missing. If it were 1960, we have the equivalent, in many communities, of leaders who are saying good water and sewer is not important because the outhouse still works just fine.

Local businesses need affordable high speed broadband to compete in the global Knowledge Economy. And they can't wait forever. What are your leaders and economic developers doing to remedy the situation?

A new study confirms what most people already know intuitively, but it is always nice to have data to back it up: Most people stop looking at search results at page three, and many expect to find what they want on page one.

It is an issue for businesses, but also for communities and economic developers. With most relocation research starting on the Web, if your community is not getting relevant community site links on the first page of most search engines, it is telling relocation consultants you are not "connected." And your community is probably not even getting on the short list for consideration. Worse, you won't even know, because no one is calling the economic development office at this stage of relocation search.

It also underscores the importance of a broad, communitywide cooperative effort among local Web sites. Without a comprehensive and collaborative effort, few of your community sites--government, economic development, tourism, civic--will show up on page one of search results.

Unfortunately, I still see many communities managing (or not managing) community Web sites as private fiefdoms that get little time, attention, or resources. And at the same time, the community is wondering why so few businesses are taking a serious look at their town or region.

Design Nine has been helping communities design Web strategies longer than any other company on the planet (we started designing community portals in 1993). Call us if you want to get your community on page one.