But life is all about repeating the same mistakes in many different contexts. So, are we reluctant regulators wrong again? Is there something we think is impossible today that will be obvious tomorrow? Can last-mile broadband be developed in a way that doesn’t rely on the incentives that drive current providers toward innovation-stifling business models?
Yes. There isn’t yet a Linus Torvalds of broadband, nor is a single competitive platform being built by volunteers to displace AT&T. But there are forces mucking up the game for those who would profit most from last-mile control.
The core of this resistance comes from municipalities. Local governments are building neutral infrastructures that allow anyone, from ISPs to community networks, to use and extend blisteringly fast broadband networks. At the end of its first year, a project in Sandoval County, New Mexico, for example, already provides many in the area with more than 10 times the capacity than anywhere else in the US.
And municipal networks are just a first step. Many Linux-style volunteers are building free wireless networks that enable participants to share access and offer capacity to others. These volunteers are also building free protocols that enable legal access without shifting control to a last-mile access provider.
These activists recognize the basic truth of what I call the McAdams theorem: Monopolists, as Cornell economist Alan McAdams puts it, don’t monopolize themselves. If the monopoly-like asset is owned by the user, he has little incentive to exploit himself. Put differently, private ownership by users creates its own business model.
Will these grassroots alternatives check the power of the big companies? I remain skeptical. But the frantic efforts of traditional broadband providers to persuade states to ban municipal broadband should give you some clue as to the potential of these services.
There are lots of interesting points. The chief one is that a monopolist can’t be a monopolist without users. We have similar choices as to whether we rely solely on Telstra for the last mile or not. It is a choice we should work out ways of efficiently exercising.