Larry is in Florence this week for the annual meeting of the International Aerospace Quality Group, the leading organization for supply chain quality standards for the aerospace industry.
Larry will present in Qingdao on Sept. 20th at the 1st International Rendanheyi Model Forum and Summit in Qingdao, China. His presentation explores the application of Big Bang Disruption to the Rendanheyi model created and pioneered by Haier and its CEO, Zhang Ruimin. Larry's earlier papers on Haier include "Open Innovation, Chinese Style," published in Boao Review, July, 2016 with Paul Nunes and Serena Jing Qui.
Congress is considering a major spending bill to correct long-standing failures to maintain the U.S.'s crumbling infrastructure. While crumbling roads, bridges, power, water and transit systems should be the focus of any major spending, there's a strong case to be made for devoting some funds for broadband deployment, particularly in the few remaining locations in the U.S. without service. Owing to high capital costs, these are primarily rural, mountainous, and tribal areas of the U.S., especially in the West.
But the last time Congress tried to close what remains of our digital divide in the 2009 stimulus bill, it divided the funding among three different agencies, imposed little oversight over contractors, and allowed spending in areas where broadband already existed. What's more, network operators across the country trying to build next generation wired and mobile services are increasingly held back not by cost but by local bureaucracy, delay, inconsistency and petty corruption.
As Congress considers whether and how to address these issues, Blair Levin of the Brookings Institution and I have proposed eight guidelines for future government intervention. These are:
- Limit and carefully control direct investments. Create a broadband acceleration fund, to be used only in areas where there is currently no provider. Determine needed subsidies on a per area basis, and have one agency, preferably the FCC, be the sole administrator. Use general appropriations to fund this program rather than increases to Universal Service fees.
- Severely limit ongoing support. Change the paradigm of small capital support with uncertain on-going operating subsidies to one that strongly favors areas where initial capital would be sufficient to overcome excessively high costs. And use reverse auctions to maximize the bang for taxpayer buck.
- Extend “Dig Once.” Ensure that broadband conduit is installed whenever federal roads are dug up for any reason. Extend the policy as much as possible to state roads and rights of way.
- Address other unproductive barriers to mobile deployments. While local authorities should continue to ensure public safety and other local interests, most of what slows down installation of new equipment promotes no public interest—in fact, the opposite. Treating small cell antenna installation on utility poles and buildings as if they were full-scale cell tower builds serves no public goal. Shot clocks, uniform pole attachment policies and other “best practices” should be established at the federal level.
- Re-engineer government processes that hinder private investment. Many local processes for application, review, and inspection are ad hoc, causing unneeded delays and costs that hold back deployment. For both wired and mobile builds of next generation networks, these must be standardized. The problem is not local regulation so much as local processes—or the lack thereof. And, as Google Fiber and other innovative experiments has shown, what local authorities really need is the right incentives to do the right thing.
- Make investments technology-neutral. Next generation mobile networks and satellite-based solutions will be truly competitive in speed and reliability with fiber, cable, and copper hybrid technologies, which are also improving. Federal programs, including Lifeline, should encourage development and deployment of all broadband technologies.
- Address nonfinancial causes of the digital divide. Availability and price have largely been solved through public and private solutions. Surveys consistently show that those who remain part of the digital divide—rural, senior, and less-educated Americans—are unlikely to take broadband at any price. Public education about the relevance of broadband and training in basic computer usage may not cost much, but without them any money spent will be at least partly wasted.
- Use the bully pulpit to encourage digital want-nots. The National Broadband Plan laid out a vision of America’s broadband future which has largely come to be or will soon, but neither the White House nor the FCC used their bully pulpit to communicate that vision to digital want-nots. The FCC should take an updated plan on the road, along with start-ups and established companies who are making the vision a reality.
Larry will testify before the Senate Commerce Committee on May 3rd, 2017 at a hearing on removing obstacles to broadband deployment in the U.S. The hearing is part of the Senate's consideration of a large-scale infrastructure bill, of which broadband initiatives, especially in rural and tribal areas, will be considered.
Video of the hearing and Larry's testimony are available here.
In today's Washington Post, Larry writes that continued breaches involving the nascent Internet of Things is holding consumers back from fully adopting the new technology. Given the intimate relationship many smart items will have with the lives of their owners, privacy and trust are essential conditions for Big Bang adoption.