Technology Futures

Add Colorado to a growing list of states that have bills pending in the legislature that would take the right to determine their own future away from communities.

Like other states (are you starting to see a pattern here?), the Colorado bill would require communities that want to invest in broadband to ask the private sector first. That permission is not likely to be forthcoming, and according to the report, even if the private sector declines to offer broadband service, the community is still stuck.

There are some issues here that are worth reviewing.

First, the article talks about (some) broadband initiatives as a way to raise revenue. Some communities are seeing it this way, but they are crazy. It makes no sense at all to invest in public infrastructure as a hidden tax scheme. Why on earth would you spend money that way when using it as a tax collection mechanism makes the community less competitive from an economic development perspective? This is an education problem--community leaders need help understanding telecom is not a way to balance the local budget, but a way to create jobs and create an economic development engine.

Second, it is important to keep our eye on the ball. Hong Kong just announced it is rolling out Gigabit Ethernet to more than a million homes, beginning later this year. Meanwhile, I just got a flyer from Verizon touting DSL. The flyer explains how fast their 1.5 megabit service is because it actually permits 384 kilobit upload speeds. That's right...here is Verizon's math:

384,000 bits/second = 1.5 million bits/second

Huh? Meanwhile, in places like South Korea and Hong Kong, they are getting broadband service hundreds of times faster than we are getting here while our own legislators are trying as hard as they can to hold their own citizens and businesses back.

It is being widely reported that Verizon has purchased MCI. This was widely predicted once the news came out that SBC was purchasing AT&T.

MCI, as you may recall, was the company that took on AT&T in the early eighties and caused the giant to be split up into seven regional phone companies, with long distance wide open. The result was that long distance rates began dropping, and local service prices went up.

But twenty years later, here we are again with essentially monopoly phone service, although it is now Balkanized. Although there are multiple phone companies, each enjoys marketplace monopoly in its own area.

There is good and bad news in all this. The bad news is that legal deregulation, as practiced by the FCC in 1984 (AT&T breakup) and 1996 (Telecom Dereg Act) does not work BY ITSELF. It is necessary but not sufficient. In both cases, it did not work as expected because the infrastructure to deliver services in communities remained in monopoly control of a single company.

As Alan McAdam, a Cornell economist, has shown in extensive study and research, the only way to counter these marketplace monopolies is to have shared ownership of the infrastructure, with property owners, the community, and the private sector all owning parts of the network.

What is the good news? The good news, of a sort, is that telephone companies are going the way of the dinosaurs. Anyone connected to the Internet has an IP address which uniquely identifies you...kind of like a phone number. The emerging ENUM system maps IP addresses to a personal identifier so that you can take your phone number with you wherever you go, and anyone, using any software that is ENUM-aware, can call you no matter where you are in the world--no phone company required.

It is going to take another five to ten years, but phone companies (including the cellular companies) will be remembered mainly as a quaint, twentieth century institution.

Many of the VoIP services like Skype and iChat use "softphones," which means the phone is really a program on your computer. You still need a headset of somekind, but the whole set up is a bit clumsy compared to the time-tested "telephone" interface we've been using for, oh, a hundred years or so.

Engadget has an article on an inexpensive (about $45) VoIP phone that actually looks and acts like a phone. The neat thing is that you don't plug it in the wall, you plug it into a USB port on your computer.

The only problem I have with this is that it ties the phone to your computer. A more practical solution is the adapter box that some outfits like Vonage sell. It plugs into your Ethernet jack (your whole house is wired for Ethernet, isn't it?), and any standard phone plugs into the box. So you can have the phone anywhere you have Ethernet access...even WiFi access.

Run, don't walk, to the nearest store and pick up a copy of USA Today. If you live in a rural community and are involved with economic and community development issues, you need to read the cover story today.

Small towns in the Great Plains are finally starting to give up "elephant hunting" and instead are using an "economic gardening" strategy. This is exactly what I have been saying in our Knowledge Economy Roadshow for the past several years.

Elephant hunting refers to traditional industrial recruitment....trying to bag a big company with lots of jobs. But small rural communities are finally starting to realize that if that is the only strategy they have, it does not work any more.

What is working? Just what I've been recommending: recruit entrepreneurs and families, not businesses. In Kansas, they are giving away free land to families that move to town, and even making cash payments to help with down payments on mortgages. They are helping the head of the household to find a job. It is still economic development, but cast in an entirely different way.

You really need to read the entire article. These communities are getting results, and are beginning to turn things around.