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Home Broadband

Roland Cole on the Information Superhighway

by Dana Blankenhorn
February 14, 2006
in Broadband, Communications Policy, Competitive Broadband Fiber, regulation
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Roland_coleRoland Cole has, in addition to his work with the Software Patent Institute, now taken on the role of Director of
Technology Policy for the Sagamore Institute for Policy Research

He writes, "SIPR  is a national
think tank based in Indianapolis. I will be working very hard on federal, state, and
local policy towards technologies such as broadband, alternative energy,
nanotechnology, and life sciences.

I will be working to launch
initiatives in three areas:

  1. Think tank projects concerning technology
    policy (studies, conferences, etc.);
  2. Adding technology issues to existing
    projects, such as the work SIPR is already doing in workforce development,
    higher education, et al.; and
  3. Helping SIPR be "state-of-the-art" in its
    own research technology – document management, collaboration, outreach
    (email, video conferences, etc.).

SIPR receives
funding from a variety of sources, primarily foundations, that range across a
broad range of the political spectrum, and prides itself on being
"independent" from all of them.

In light of that, some thoughts summarizing how to think about solutions to the current "last mile" problem.


It strikes me that the Highway Trust Fund comes closest to a funding model
that would promote most of the goals we are seeking.

Interstate_highway_1If we had a bits-neutral quantity measure of use, (perhaps with a large "bucket" at
the bottom end that all paid the same price), and users paid that
bits-neutral fee to their service provider, there could be a viable
market (with competition, even), for organizations to provide
bits-neutral transport. One can even imagine that the builder of the
transport, the owner of the resulting physical facilities, and the
operator of the resulting physical facilities, could be one organization

or three or more, especially when you consider that the Internet is
actually a connection between many, many subnetworks.

Key to making
this work is NOT that the government must always be the fiscal agent (as in
a tax), so much as it is in preserving the bits-neutral pricing scheme. The
goal is for the user to be able to
choose which bits he or she sends or
receives, and not be subject to substantial incentives to choose bits from
the transport provider, or bits providers chosen by the transport provider.
Ideally, the user could choose, within the user’s chosen category, how to
divide the allowance between upload and download. (Note that many
web-hosting companies come very close to this sort of bits-neutral pricing
now, charging for storage and "transfer" without distinguishing between
transfer to and transfer from. This goal is key, not because we
"policy-wonks" know better what is best for each user, but because
experience shows that the system sees much more innovation and freedom when
this sort of pricing is in effect.

I also think the "natural
monopoly" factor is mitigated somewhat by the change in economies of scale.
It may still make sense for a small number of transport choices (perhaps
only one) at a single user site, but with technology change and
internetworking, the number of sites that need to
be in a single tranport
choice neighborhood is hopefully getting smaller, and is subject to boundary
shifting between each neighborhood. Maybe franchises could be to a specified
neighborhood, rather than an entire city. (They could still be granted by a
multi-neighborhood organization, even statewide, if that would help minimize
per transaction costs.) We do building permits this way now — we do not let
a single builder have an exclusive deal for an entire city, but make it
apply for specific lots or sets of lots. The question is whether the
technology has evolved enough to allow the same  process to be
economically feasible for transport technologies.

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Dana Blankenhorn

Dana Blankenhorn

Dana Blankenhorn began his career as a financial journalist in 1978, began covering technology in 1982, and the Internet in 1985. He started one of the first Internet daily newsletters, the Interactive Age Daily, in 1994. He recently retired from InvestorPlace and lives in Atlanta, GA, preparing for his next great adventure. He's a graduate of Rice University (1977) and Northwestern's Medill School of Journalism (MSJ 1978). He's a native of Massapequa, NY.

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