I agree with most of this:
You might have read books about icebergs, but you will
never know as much about icebergs as the captain of the Titanic did.
How do you explain the awesome and powerful without experiencing them
first hand? If bandwidth was given away, or at least priced at a
minimum, then innovation would take care of the rest: a million flowers
would bloom.
My take on this is that someone
should take the good and worthy folk who are trying to run our telecoms
companies and bang their heads against a brick wall. We should keep
banging their heads until these fools give up with their insane plans
to bombard us with new services, such as video and music downloads.
Just give the people cheap bandwidth, if you do that you set the genie
free.
Telecoms is like the road and water
system, it is a utility and should be run as a public good. There are
millions of engineers and entrepreneurs who are capable of
out-inventing and out-innovating any one inside a telecoms company.
Elsewhere in the world, particularly America, people are grasping this
truth and are taking matters into their own hands.
The
great English economist Ronald Coase won a Nobel Prize in 1991 for
giving his profession a wake-up call. He explained the importance of
transaction costs for the economy. Coase argued that, if you removed
transaction costs, all resources would flow to the places in the
economy where they could achieve maximum efficiency. Reducing
transaction costs is like pumping Prozac into the water supply,
everyone starts to feel happy.
WiFi can energise
cities and economies by beaming high-speed internet access to the parts
of the economy that wires can’t reach. The US city of Philadelphia has
grasped this and has announced plans to roll out WiFi. Mayor John
Street sees the project as a great way of promoting Philadelphia:
"Think of all the business transactions that could take place on
something as simple as a park bench. Philadelphia has the resources and
know how to make this happen," he says.
A utility, yes, a public good, quite possibly, build it and they will come, almost certainly, but I’m still not quite sure about getting cities like Philadelphia building it. As Coase himself noted, public goods can indeed be provided by the private sector. The question is, who will do it better?
Quite possibly (even probably) not the incumbent telecoms suppliers as they would simply be eating their own lunch. But that just means loosening the regulation to allow new entrants into the market. Not, necessarily, bringing in those who do such a good job of running the schools to do it.
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