In an exodus from persecution in Illinois, Brigham Young, led a vanguard group of Mormons through the Great Plains of the central United States to the Great Salt Lake Valley. After an arduous journey and gazing down upon the area, Young proclaimed, “Here is the place where my people Israel shall pitch their tents.” Young saw a place where his people and their descendents could prosper. We leave it to present day Utah residents and Mormon adherents to decide whether a “promised land” was reached.In a more literal sense, the Great Salt Lake Valley is the home of a new high-tech UTOPIA (Utah Telecommunication Open Infrastructure Agency). Rather than a land flowing with milk and honey, this is a land flowing with data and information. This bandwidth promises to ease commercial transactions and enable the electronic delivery of content and services to individual homes. As we gaze upon this new world, we might paraphrase Young, “Here is the place where my people shall be connected.”UTOPIA is a publicly-chartered and owned institution that controls the network that connects a number of cities in the Great Salt Lake Valley. The agency is installing an optical fiber network promising 100 Mbits/second residential and commercial bandwidth. This bandwidth is more than an order-of-magnitude faster than conventional high-speed cable or other residential optical networks offered by companies like Verizon. It is sufficient to pipe down high-definition video with additional bandwidth available for growth.However, UTOPIA only provides the digital pipes, not any content or services. The idea is that the physical network is a natural monopoly like electricity or water services and ought to be a regulated monopoly. Once this pipe is in place, the assumption is that there will competition to provide services like phone connection, Internet connections, and video programming driving down prices.
There are many communities where a cable company will come in an drop coax cable to every home while a telecommunications company will follow, perhaps years later, and drop optical fiber to the same houses. There is duplication of effort which, on the face of it, appears to be an inefficiency. Moreover, service providers are limited to those companies with the economic resources to build a full-scale network. Competition for services is either non-existent or fought out between only a few large companies. Prices tend to stay high. The UTOPIA plan tries to circumvent this by treating bandwidth itself a public utility.
UTOPIA is an interesting and novel concept. Municipalities and states ought to track the progress of this model for providing bandwidth. The potential downside is that public utilities tend to be lethargic and avoid innovation. If UTOPIA had been conceived a decade ago, they might have decided to lay copper instead of optical fiber. Once this investment is made, would a UTOPIA be eager to replace this infrastructure? The inefficiency of two companies laying two types of lines may be part of what is termed “creative destruction” where innovative economic transformations are built on the ruins of previously successful enterprises.
Other municipalities may adopt similar or hybrid models to deliver bandwidth. Overtime we may see what mix of government-regulated monopoly, private enterprise, and technological progress will create the freest possible environment for innovation and growth in residential and commercial bandwidth.
This entry was posted on Sunday, June 18th, 2006 at 7:20 am and is filed under Economics, Social Commentary. You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
Utopia
In an exodus from persecution in Illinois, Brigham Young, led a vanguard group of Mormons through the Great Plains of the central United States to the Great Salt Lake Valley. After an arduous journey and gazing down upon the area, Young proclaimed, “Here is the place where my people Israel shall pitch their tents.” Young saw a place where his people and their descendents could prosper. We leave it to present day Utah residents and Mormon adherents to decide whether a “promised land” was reached.In a more literal sense, the Great Salt Lake Valley is the home of a new high-tech UTOPIA (Utah Telecommunication Open Infrastructure Agency). Rather than a land flowing with milk and honey, this is a land flowing with data and information. This bandwidth promises to ease commercial transactions and enable the electronic delivery of content and services to individual homes. As we gaze upon this new world, we might paraphrase Young, “Here is the place where my people shall be connected.”UTOPIA is a publicly-chartered and owned institution that controls the network that connects a number of cities in the Great Salt Lake Valley. The agency is installing an optical fiber network promising 100 Mbits/second residential and commercial bandwidth. This bandwidth is more than an order-of-magnitude faster than conventional high-speed cable or other residential optical networks offered by companies like Verizon. It is sufficient to pipe down high-definition video with additional bandwidth available for growth.However, UTOPIA only provides the digital pipes, not any content or services. The idea is that the physical network is a natural monopoly like electricity or water services and ought to be a regulated monopoly. Once this pipe is in place, the assumption is that there will competition to provide services like phone connection, Internet connections, and video programming driving down prices.
There are many communities where a cable company will come in an drop coax cable to every home while a telecommunications company will follow, perhaps years later, and drop optical fiber to the same houses. There is duplication of effort which, on the face of it, appears to be an inefficiency. Moreover, service providers are limited to those companies with the economic resources to build a full-scale network. Competition for services is either non-existent or fought out between only a few large companies. Prices tend to stay high. The UTOPIA plan tries to circumvent this by treating bandwidth itself a public utility.
UTOPIA is an interesting and novel concept. Municipalities and states ought to track the progress of this model for providing bandwidth. The potential downside is that public utilities tend to be lethargic and avoid innovation. If UTOPIA had been conceived a decade ago, they might have decided to lay copper instead of optical fiber. Once this investment is made, would a UTOPIA be eager to replace this infrastructure? The inefficiency of two companies laying two types of lines may be part of what is termed “creative destruction” where innovative economic transformations are built on the ruins of previously successful enterprises.
Other municipalities may adopt similar or hybrid models to deliver bandwidth. Overtime we may see what mix of government-regulated monopoly, private enterprise, and technological progress will create the freest possible environment for innovation and growth in residential and commercial bandwidth.
This entry was posted on Sunday, June 18th, 2006 at 7:20 am and is filed under Economics, Social Commentary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.