UTOPIA (Cont'd)
Jesse Harris has returned from D.C., and provides responses to my 2 questions on UTOPIA.
My questions (posts here and here) were (1) whether UTOPIA is financially viable and (2) why UTOPIA is cherry picking in non-pledging cities.
You can read Jesse's thoughtful response at FreeUtopia.
On point 1, Jesse argues that the big costs have been sunk and that additional costs will be much smaller as additional homes are passed -- meaning a lower overall cost/subscriber than the very high current figure. That might be. I'd like to see some numbers (e.g., additional cost per marketable home passed).
On point 2, I think we simply disagree whether it is appropriate for UTOPIA to be in the business of establishing the policy and practice of deploying systems only in new subdivisions where homeowners will be forced to use the product (since the homeowners will be forced to pay for it with their HOA fees). To me, this seems like a very significant departure from UTOPIA's original mission -- ubiquitous service.
To clarify, I don't think the directors of UTOPIA intend to work "malice" in the non-pledging cities. Rather, it goes back to point 1; are its actions being guided by desperation? Such a significant departure from a core-mission principle seems to signify the "neon paint" phase of the business plan. That is a phrase my wife and I use when we see struggling businesses scribble "Clearance" or "Everything must go" in neon paint on their windows; rather than being something included in the original business plan, it is an addendum added to the plan (usually the last chapter of its existence) when things haven't worked out quite as well as originally hoped.
Regardless of intent, as I described here, I believe that cherry picking does work harm to communities that abandon requirements for uniform and equal services for all citizens.
My questions (posts here and here) were (1) whether UTOPIA is financially viable and (2) why UTOPIA is cherry picking in non-pledging cities.
You can read Jesse's thoughtful response at FreeUtopia.
On point 1, Jesse argues that the big costs have been sunk and that additional costs will be much smaller as additional homes are passed -- meaning a lower overall cost/subscriber than the very high current figure. That might be. I'd like to see some numbers (e.g., additional cost per marketable home passed).
On point 2, I think we simply disagree whether it is appropriate for UTOPIA to be in the business of establishing the policy and practice of deploying systems only in new subdivisions where homeowners will be forced to use the product (since the homeowners will be forced to pay for it with their HOA fees). To me, this seems like a very significant departure from UTOPIA's original mission -- ubiquitous service.
To clarify, I don't think the directors of UTOPIA intend to work "malice" in the non-pledging cities. Rather, it goes back to point 1; are its actions being guided by desperation? Such a significant departure from a core-mission principle seems to signify the "neon paint" phase of the business plan. That is a phrase my wife and I use when we see struggling businesses scribble "Clearance" or "Everything must go" in neon paint on their windows; rather than being something included in the original business plan, it is an addendum added to the plan (usually the last chapter of its existence) when things haven't worked out quite as well as originally hoped.
Regardless of intent, as I described here, I believe that cherry picking does work harm to communities that abandon requirements for uniform and equal services for all citizens.
posted by steve u. at 11/19/2007
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3 Comments:
I'm generally against UTOPIA since I see it as government competing against private companies. The argument that UTOPIA is filling a niche not met by private competitors that should be doing better for consumers is compelling but not compelling enough at this time for me to support putting taxpayer money at risk when demand isn't there yet for the huge bandwidth we're talking about.
That said, I don't really understand why you're upset that some developers would want to provide fiber to their customers in the method you've been complaining about. I'd consider this product a major feature in a new home and I can easily see it being the selling point that would push a buyer over the edge in support of buying a home like this. This is how nifty technologies are supposed to take root in a market. They start out as a luxury feature then demand makes them more ubiquitous and less expensive. Sounds to me like the cherry picking you're concerned about is a lot less objectionable than forcing tax payers to provide backing for a dubiously promising municipal broadband project.
The main problem with cherry picking -- from a community perspective -- is that some (at times, most) people don't get good services. If companies are allowed to use public resources (streets and poles) but have no responsibility for serving everyone, they will only go where profits are great (new, affluent subdivisions), and the remainder of the town will be technologically frozen in time. Some get the cool stuff you describe, while everyone else gets ignored. Thus, cherry picking can create a serious digital divide.
That's not always the case. If I were on the city council of an older city that didn't have many growth areas, I'd look more favorably on cherry picking than if I were on the city council of a city with lots of growth areas. The profitability of growth areas creates greater economic incentives for a company to build plant to older, less-profitable areas.
This isn't like fast food or other businesses. It's not even like satellite TV. Cable companies use public resources (streets and poles) to make a buck. If they are going to use the public's resources, the general practice should be a requirement that they provide uniform offerings to the public. But, again, that should be up to the cities to decide.
Jeremy: The argument becomes significantly more compelling when you realized that since 1996 Qwest collected a cool $1.4B windfall to build a network almost exactly like UTOPIA. You have three options at that point: require construction of the promised fiber optic network, get back the money they took with interest and penalties, or go ahead and build it yourself.
The first option is open to massive manipulation by Qwest as far as timetables, requirements and so forth, not to mention they'd fight it tooth and nail. The second option involves years of expensive litigation and you don't end up with the promised network. Given the legal hassles of the first two options, UTOPIA seems like the best option available. It's easy to fall into the "private competition" trap until you realize that local phone monopolies are as close to a government-run system as it can come without actual ownership.
(I should note that my ideal option involves banning integrated vertical monopolies so that network operators cannot also be retailers.)
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