The beginning of July 2007 held two things which caught my attention and may prove to be an interesting milestone in the road towards open access.  The first was big-scale.  Last week Mr Kevin Martin, the chairman of the US regulator, the FCC, came out and told a US newspaper what he has in mind for the 700 MHz spectrum auction in late 2008.  He talked about an 'open network' which would permit any wireless device to connect to it, and which would place no limits on the services that could be offered across it or by whom.  In other words, it seems he wants a pure mobile web, where customers can download any broadband application, and have no restrictions on the content that is served or on the devices that would be deployed by end users to access them.  It sounds to me like a flat rate, open IP architecture where devices will need only the most cursory adherence to the air interface, but where applications are pure IP, and most services are delivered over the web. Indeed, as one commentator has said, "It sounds like the halcyon days of the Personal Computer, where just about anyone could write an application." 
 
If Chairman Martin gets his way, this will spark the beginning of the end of the cellular walled garden as we know it, and offer a form of wireless network neutrality -  at least in this slither of spectrum.  He made passing reference to the idea that no downloadable software should be illegal, or should be able to harm the network, but apart from that hinted that there would be no restrictions allowed by the operator on applications – a far cry from the recently launched Apple iPhone, which is locked onto the closed AT&T network!
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I spend weekends, whenever possible, at our home in the rural County of Dorset.  The nearby town of Yeovil does not have a lot going for it but it does have a very successful football team which, over recent years, has enjoyed great success moving up the leagues and next weekend will be playing at the breathtaking new Wembley Stadium against BlackpooI for the right to move up to the Champions League - just behind the Premier League.  Quite something for this small Somerset town!
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It is not often that I am brought up short with information about some significant OPLAN development which hitherto has remained off the radar screen but when I recently received an email from consultant and researcher Ken Murricane,  it made me sit up.  Ken has undertaken excellent research for the Foundation in the past and has a wide-ranging grasp of what is going on around the world in the development of open access networks but when I read his email about OPLAN developments in France, I asked him to do some more digging and this he has done.  You can read about it in his report which has a brief case study of the first of these 'francoplans' to become operational, in Limousin.  I have long argued that, at this stage of the early development of OPLAN development, grand, 'top-down' national schemes are unlikely to be successful for a number of reasons.  Firstly, to a greater or lesser extent, it requires the backing of a 'blueprint' enshrined in public policy which is a big bet to place  given the multitude of local variables which are likely to determine success in any situation – rather, let a thousand flowers bloom and use the experience this delivers to help frame public policy.  Secondly, any national OPLAN initiative which involves the framing of public policy and regulatory provisions,  will inevitably attract attention and invite strong lobbying from vested interests that are threatened by any access strategy and firmly set against it.  So, could it be that France, the last place in the developed world one might imagine OPLAN ideas to take hold, will turn out to have quietly stolen a march on the rest of Europe and the US?  We wait and watch.
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The butterfly effect was all the rage a few years ago - the idea that a butterfly's wings might create tiny changes in the atmosphere that ultimately cause a tornado to appear (or, for that matter, prevent a tornado from appearing).   It never really grabbed me (probably due some peanut my mother ate when she was pregnant) but this notion from chaos theory of sensitive dependence came rushing back to me yesterday when I read the news about how new life has suddenly been breathed back into the net neutrality debate in the US. 
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Last evening  I was at an old friends birthday party ('old' as in 'ancient' and  'old' as in 'longstanding').  A distinguished former BBC TV producer and now a professor at a US University, few of his other guests had any idea of our common current link through the OPLAN Foundation - of which he is a member of the Council of Reference.  So when asked, "What do you do",  I respond with reference to this current link I have with our birthday boy host.   It evokes the inevitable response, "..and what does OPLAN  stand for?"   I  would like to think that this is an invitation to start extolling the nature and benefits of open access networks, but I know it is not and that it is a simple request to unpack the acronym.  "It stands for Open - Public - Local -Access-Networks".   I feel like following this up with, "...and like the renowned British TV commercial for the wood-dye, Ronseal - they do exactly what it says on the tin!"  

Although there is no hard and fast definition of an OPLAN, I choose carefully and specifically when applying these 5 words to denote the key charateristics of this new paradigm of digital network deployment.  You will find a more comprehensive list of key defining characteristics OPLANs here.  And last but not least in that list, is the proposition that an OPLAN, "is funded by the private sector - not a backdoor to re-nationalisation or state control".

It is time take a look at this important element, especially as so many municipalities, cities and local public authorities around the world are in the vanguard of considering how to bring to their local communities greater benefits from the digital technologies than is available from a continued commitment to the outdated, vertically integrated business models of the cable and telco sectors.   These local, democratically accountable public bodies are quite right to be concerned that their citizens derive full benefit from these technologies, but they should focus on ensuring that this is delivered through free and open market activity and most important of all, that they as one of the largest potential 'users' of an OPLAN, are 100% dedicated to doing so up and down and throughout their organisations.   We consistently argue that the superficial competition that now exists between former state-created telecom monopolies and their more recently formed and public-policy sustained, 'me-too' vertically integrated competitors is a long way from "free and open market competition" which would be characterised by new, innovative and highly destructive (to the vested interests) business models deploying this 'next genus' infrastructure.   But that is no reason for the local public sector to try and appropriate to itself the task.   As my old grandmother taught me - "two wrongs don't make a right".   I have had many a vigorous discussion with Jim Baller (one of the leading US lawyers advising cities on how to realise their muni-wireless dreams) and others on what I regard as the flawed direct involvement of the local public sector in directly developing broadband infrastructure initiatives or providing 'free intermet access for all'.  Dianah Neff who acquired fame from her former pioneering role as CIO of the City of Philadelphia (and is also a member of the Foundation's Council of Reference) is someone I greatly admire for her stance but it is worth watching this ZDnet extended interview Dianah gave in August 2005, to see the extent of the direct participation of the public sector which she advocates - a position with which I do not agree. 

Well, now we have some interesting, well researched evidence on the impact of these direct local government interventions in this sector.  The Reason Foundation ('free minds and free markets'), the respected US free market think-tank published in November 2006 a report entitled, "A Dynamic Perspective on Government Broadband Initiatives", witten by Jerry Ellig and Adrian Moore.  It is worth reading on two scores.  Firstly, it sets out some strong evidence and arguments against the benefit of direct public sector involvement in the deployment of local broadband infrastructure.  Secondly, it is an infuriatingly inadeuate piece of research in that it unquestioningly accepts the vertically integrated structure of the current telco/cable sectors as if these are the natural out-workings of a free-market, rather than the bad-fruit of decades of state intervention, vested interest lobbying and flawed regulatory regime and swallows the telco story that 'internet access' is the one and only topic on the local broadband network agenda.    The authors rightly state that,  "Policymakers need to consider some unique problems when a government enterprise enters a dynamic market such as the provision of internet services", but fail to acknowledge, let alone examine, the fact that the today's status quo and 'apparent' competition is through and through, state created and controlled.  If you have limited time or interest, then I suggest you restrict yourself to reading the summary.

A refreshingly enlightened and far more informed consideration of the proper role and limits of government participation in stimulating 'next genus' broadband infrastructure is contained in the paper, "America's Technology Future at Risk: Broadband and Investment Srategies to Refire Innovation" written by Clyde Prestowitz, President of the Economic Strategy Institute in Washington DC, USA.  This has been available on the OPLAN website for some time now but it has not received the attention I believe it deserves.  I can strongly recommend this as a 'must read' for anyone wishing to gain an informed understanding of the interface between government public policy and the deployment of disruptive technologies and business models around the world.  It is worth quoting here from the Executive Summary of Clyde Prestowitz's work( Page XV):

"...It is also clear that new business models will have to be developed. The question is what role the government should play in that development. Now that real, facilities based competition has emerged, there need be less concern than previously with whether the market is sufficiently competitive. In view of that, and in view of the largely counter-productive regulatory role of the FCC over the past then years, the objective now should be to allow market forces to do their work.  Policy makers and legislators need to assure that investment and technology deployment are no longer being deterred by artificial regulations and that regulators are not trying to favor particular sets of participants. Free and fair competition should prevent both abuse of market position and restrictions on the free flow of information over the telecommunications networks. On the other hand, it is possible that competitive forces will not always be operative. Thus, part of a new FCC mandate in the context of new business models should be to monitor competition and market power abuse. All participants have pledged that they will not restrict information flows.  The FCC’s role should be to hold them to those pledges with any abuse of market power being subject to special anti-trust action triggered by the FCC."
 
Just so!  As we concluded in our study for the World Bank, it is too early to find conclusive and concrete statistical data of the socio-eocnomic benefit of OPLANs but there is now some evidence of the negative impact of direct local government intervention in the provision of local networks - not to mention the macro impact refered to in the above quote and frequently bemoaned by me and others.  We need to ensure that the debate progresses and does not as a result of research such as that to have come out of the Reason Foundation, fall back into an unquestioning acceptance of the state-sustained status quo which is preserving the survival of vertical integration and closed networks.  That would short change our citizens as much as would taxing them to pay for the well meant but foolish direct government broadband projects that are springing up in various cities - mostly in the US.  Read again 'what it says on the tin' and let's focus on ensuring that the market is free enough to permit the successful entrepreneurial investment in what the world really needs - disruptive technologies deployed under radical new business models - in a word, OPLANs.
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I am no physicist - I am not even a techie.  But I do try and equip myself with sufficient understanding of the 'facts of things' to know when there may be bull-shit in the air.  Such basic understanding is a prerequisite in my book to any creative thinking about how new technologiews might be creatively deployed so as to impact positively on human relationships.  Back in 1963 I was given a book with the title, "Inventing the Future" - which even then was my sort of reading.  Its author was Dennis Gabor, a Hungarian-born electrical engineer who found a home at Imperial College, University of London and who, in 1971, was awarded the Nobel Prize for Physics for his invention of holography.  Following his retirement in 1967, Gabor had time and motivation to think outside the physical box and, in his own words, "I became more and more convinced that a serious mismatch has developed between technology and our social institutions, and that inventive minds ought to consider social inventions as their first priority."   There may not be much in that book that is directly relevant to our circumstances in 2007, but it is worth pondering on these words of a great thinker and physicist as the issue of the use and allocation of radio spectrum jumps back up the news agenda - in the UK at least.  

This is indeed an important topic with universal implications and without wanting to be too 'gaboring' by racing off into esoteric or philosophical matters, it might be worth asking three fundamental questions that have long been swimming around my mind in relation to this question.  The un-examined conventional wisdom may not always be the best starting place for 'inventing  the future'.  Increasingly that is becoming evident with the issue of 'open access'  networks - maybe the same applies to society's use of radio spectrum.   But before the questions, a little background.

Actually, the trigger for this blog entry was an item in the Daily Telegraph (January 1st 2007) with the title, "Live Acts 'threatened by Ofcom proposals'", suggesting that the UK regulator, (Ofcom) is about to auction off to the highest bidder the spectrum currently reserved by convention for use by radio microphones in theatres and concert halls.  Ofcom is reported as stating that such, "special treatment for certain industries would run counter to its free-market approach to the airwaves."  The article states that this is, "raising fears that cash-rich mobile phone companies will snap it up at prices other industries cannot afford".

QUESTION 1    Does Ofcom (and indeed the regulatory community at large) understand what a 'free-market' really is?  Virtually all the players in today's so-called free-market of television and telecoms have the shape and form that they have as a result of being direct and protected (i.e. regulated) descendents of former monopolies - most if not all of which were deliberately created by state intervention in years gone by.  The BBC, that mother of all television stations, was created by the state, funded by taxation and given exclusive right to use certain parts of the radio spectrum.  All subsequent competitors have (until this day of the broadband internet) basically been regulatory clones when it comes to access to spectrum.   The same in the world of telecoms - starting with the state-created monopolies of the PTTs, we now have a myriad of so called operators - but all singing to the same basic song of using access to technology coupled with sector-specific regulatory protection to provide a 'service' to end users - which, given the abundent and low cost nature of these disruptive digital technologies, could largely be 'self-provided'.   If you are still having difficulty following me, then think about YouTube in the world of television and Skype in the world of telephony.

So it is my conclusion that it is a bit rich for Ofcom to talk about being concerned about 'free-markets' when the biggest and most powerful players in the market place are all artificially created and sustained by yesteryear's public policy and regulation.   Most regulators mouth the mantra of wanting to see market competition put them out of business - but if that were true it would require the growing number of those working in the regulatory community were uniquely odd-balls, cheering on the day of their own redundency.  No - the people working for Ofcom and all other regulators are as human and normal as you and me!

So, as the UK looks forward to the 'digital-switchover' when the analogue signals of the terrestrial broadcasters are turned off and everyone receives their TV by a digitised signal, quite properly the Office of Communications (Ofcom) is starting to ask the question 'what should be done with this spectrum?  It has published its Digital Dividend Review for public consultation, setting out proposals for the most effective use of the radio spectrum released by this switch to all-digital television broadcasting between 2008 and 2012.

Para 1.1      "The radio spectrum is a scarce resource of enormous importance in the modern world."

Para 1.22     "Our objective in releasing the digital dividend is to maximise the value that the use of this spectrum is likely to bring to society over time.   It is emphatically not our objective to manage the spectrum so as to raise revenue for the Exchequer – nor, given our statutory duties, is this a consideration that Ofcom takes into account."

QUESTION 2    What fundamental, a priori reason is there for believing that part of the electro-magnetic spectrum known as "radio freqeuency" (RF) requires specific public policy and regulation?

Not even in the darkest days of Soviet Communism did the apparachniks come up with the idea of allocating (let alone selling off to the highest bidder) the use of the colour 'red' or 'blue'.   How come the millions of citizens around the world can self-organise the use of this 'visible' part of the electro-magnetic spectrum  relying simply on private property rights and the rule of law whereas the RF part of the spectrum requires some centrally organised allocation?  This might generally be refered to as a licence exempt approach and there are strong and well argued advocates for this - plus the evidence of the immense social value and technical and commercial innovation that has resulted to date from such 'license exempt' steps as that which gave us WiFi.   

Now, I am not for one moment suggesting that some process of formal spectrum allocation was not required for the centuries when, unlike wielding a paintbrush of wode, sending an RF signal was costly and exclusive and was done in a somewhat techno-ham-fisted manner.  But the world has moved on and the miraculous digital technologies of optical fibre + silicon chip (computer) + software controlled radio, now mean that smart digital consumer devices are cheaper and more prolific in the developed world than canvas, brushes and tubs of coloured paint.  We can all have access to radio technologies which, only a few years ago, could only be acccessed by a few. So please, PLEASE let us think about such issues from first principles and not simply proceed towards tomorrow on the basis of what we did yesterday.

QUESTION 3  My final question really results from a combination of the first two and is an economic question.   Ofcom states that its objective is, "NOT to raise revenue for the Exchequer".  However, resting on the mistaken assumption in the new digital world that 'spectrum is scarce', it is opting for a process of 'auction' to allocate this supposed scarce resource.  As long ago as March 2003 in an article ("Launching Telecoms II") published  its Quarterly Technology Review, The Economist [  ] spelled out the meaningless of this moden myth of spectrum scarcity, but it suits several vested interests (and of the course the regulator) to ensure it is perpetuated - for where there is scarcity (real or artificial) there are $$$$$$$.   For a fulller account of the facts and arguments behind how "maximising the value that the use of this spectrum is likely to bring to society over time" (Ofcom's words not mine!) can best be achieved by an 'open access' approach, then visit the Open Spectrum Foundation.  Under the visionary leadership of our good friend Robert Horvitz, this non-profit is doing excellent work singing to the same tune as the OPLAN Foundation.

Anything is scarce if 'all of it' it is sold to one intermediary person rather than to anyone in a free market.  Government created market failure is what I call it.   Has Ofcom - or indeed anyone else - taken a look at whether the innovation and wealth creation that results from selling a slug of spectrum to one party - who can then charge end users 'over-the-cost-odds' for access to it, contributes more, less or about the same "value to society" as would be the result of deploying it under a policy of open access, license exemption?     After all, one man's revenue is another persons cost and although there is little doubt that if Ofcom sells of the old analogue spectrum, then budding entrepreneurs will come up with plenty of good ideas about how to use this to make money - and enough to recover the cost of the huge multi-billion dollars they paid for the exlcusive use of the spectrum.  But as we all can now see, such innovation, far from being dampened by a licence exempt strategy, is even stimulated.  I think I can categorically state that more value and benefit has been derived by the world from WiFi, infra-red computer mice and microwave cookers than is every likely to be the case for 3G.  But the UK Treasury did make £22bn from the sale of those licenses but I am still waiting for Gordon Brown to send me a cheque for my share of that - which I reckon ought to be about £500.  With that amount of money, every man, women and child in the UK could afford to set up their own web-based 'radio station'!    But maybe that's not the aim of the Ofcom game.

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There are few personal benefits from trotting around the globe for the OPLAN Foundation ‘opening minds to open networks’, but one of the them is certainly discovering and getting to know interesting individuals equally committed to OPLAN principles but coming with a deep understanding from a specialised and entirely different perspective from me.  I am no techie, so when I encounter someone who ‘is’ and who I can understand and communicate with around this topic, I am particularly excited and stimulated.

That has happened twice recently at two different events.  The first was in Stockholm where I was invited to speak at the “The Broadband Ship 2006” event organised by The Swedish Urban Network Association (Svenska Stadsnätsföreningen – SSNf).  This non-profit association was formed in 1989 to link the numerous Swedish network owners who are actively engaged in the development of local broadband infrastructure – almost all on an open access basis.  SSNf now has well in excess of a hundred members in this OPLAN-hot country....

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That's what it seems like with what are probably two of the world's most advanced and sophisticated regulators impacting the communciations sector - the US Federal Trade Commission (FTC) and the UK's Office of Communications (OFCOM).

I commented before in this Blog on the vital relationship between "INTERnet" neutrality (or openness) and LOCALnet neutrality (or openness) and how the world's citizens are screaming to maintain the former and 'win' the latter and how the telecoms and cable cartel are hell-bent on preventing it.

First to the USA where the 'net neutrality' debate is raging and the FTC has formed an Internet Access Task Force to take a look at the issues at stake.   Earlier this week, FTC chairman Deborah Platt Majoras told a meeting of the Progress & Freedom Foundation that she has formed this task force to examine issues being raised by converging technologies and regulatory developments. "I also have asked the Internet Access Task Force to address what is likely the most hotly debated issue in communications, so-called 'network neutrality,'" she said.  "I urge caution in proceeding on the issue. I question the starting assumption that government regulation, rather than the market itself under existing laws, will provide the best solution to a problem," Majoras said.

Apparently the FTC lives in an upside-down world (or has it just been listening to keenly to the special pleading of the telco-cable vested interests?).  Anyway, it expressed caution in its approach, warning that broad regulatory mandates that employ a 'one size fits all' philosophy always have unintended consequences.  In this case, the authority questions whether net neutrality or similar legislation could have the effect of entrenching existing broadband platforms and market positions, as well as adversely affecting the levels of future innovation and investment.   Eh?

The end result could be a diminution, rather than an increase, in competition, to the detriment of consumers, Majoras said.   "While I am sounding cautionary notes about new legislation, let me make clear that if broadband providers engage in anticompetitive conduct, we will not hesitate to act using our existing authority. But I have to say, thus far, proponents of net neutrality regulation have not come to us to explain where the market is failing or what anticompetitive conduct we should challenge; we are open to hearing from them," she said.

So in the USA, the telecoms lobby is arguing strongly that there should be no new legislation to permit it from destroying the internet's neutrality (openness) - leave the  market alone!

Meanwhile, across the pond in the UK - the cable and telco lobby is doing quite the opposite - invoking regulatory and legal intervention to deter end users from using Skype and other forms of VoIP - because of all sorts of dangers.   OFCOM actually spell's out what it is thinking about doing to protect the poor end user including:   1.  Establishing a legal code of practice to ensure VoIP providers  alert consumers to possible 'deficiencies' in the service  2.  Insisting on labels on VoIP kit warning of possible problems, e.g. that loss of electric power will kill the phone line - at a cost of about £1 (US $1.89) per customer and 3.  Forcing VoIP providers to warn consumers about the lack of facilities 'which they have come to expect from telephone service', e.g. lack of answering machine facility.  Of course, there are some dangers with VoIP that OFCOM do not spell out - like it causing havoc with the financial stability of the very entities that they exist to regulate - and hence, potentially risks the very need for an OFCOM at all - but we woudn't expect them to take such a self-interested line.

Fortunately, the likes of Skype and Yahoo have stepped up to the plate and responded in a very robust manner.

Clearly, the 120 milion registered user of Skype together with a growing number of the rest of the world is beginning to wake up to the fact that for far too long, it has remained in the grip of the most powerful global cartel of all time – the international telecoms sector.  This consumer servitude is in no small measure due to the mountain of sector-specific public policy and regulation which the industry has skilfully managed to bring into being over the past two decades.  So when Skype says in its latest statement that Ofcom appears to be ‘in favour of the status quo’ you bet they are!   The ‘regulated’ relies on the ‘regulator’ for survival just as much as the other way round.  

In any earlier age, disruptive technologies, such as the digital technologies of abundance which underpin innovative applications like Skype (viz the silicon chip, optical fibre and software con-trolled radio) would have been free to prosper or otherwise at the hands of end users in an open and free marketplace.  Not so in the heavily regulated telecoms sector which has been carefully fashioned over the decades with public policy complexity aimed at prolonging an industry based upon a business model (based on charging for scarcity) which, left to market forces, would long since have withered.

Skype is the biggest money making telecoms opportunity since Alexander Graham Bell invented the telephone.  Only this time we ALL make money - shed-loads of it by keeping it in our pockets and out of the hands of the telcos.  A huge proportion of the $1,600bn which the world currently shells out each year to the conventional telecoms industry, could remain within our economies to lower business operating costs and improve public sector services – not to mention encourage more and richer interpersonal, multimedia ‘conversation’.  As our recent study for The World Bank clearly indicates, the world is at last waking up to this fact and there is no turning back.

But the dead horses (...any of you have heard me speak will know what I am referring to) are clearly twitching as they face in opposite directions!   More Luddite appeals for, "Market intervention and regulation please" on this side of the Atlantic and "Get off our back" on the other side.    "We don't know where we are going - but we are on our way!"...

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