roundtable: Building the Information Infrastructure the Easy Way (Feb 1995)

roundtable: Building the Information Infrastructure the Easy Way (Feb 1995)

Building the Information Infrastructure the Easy Way (Feb 1995)

Vigdor Schreibman - FINS (fins@access.digex.net)
Tue, 21 Feb 1995 12:06:12 -0500 (EST) 

Date: Tue, 21 Feb 1995 12:06:12 -0500 (EST)
From: Vigdor Schreibman - FINS <fins@access.digex.net>
To: Vigdor Schreibman - FINS <fins@access.digex.net>
Subject: Building the Information Infrastructure the Easy Way (Feb 1995)
Message-Id: <Pine.SUN.3.91.950221120322.10485B-100000@access2.digex.net>


===========================================================================
FINS SPECIAL REPORT                                       February 21, 1995
===========================================================================
                                   We ought to treat the fibre optic system
                                          just the way we treat our roads--
                                                support it with tax dollars
                                          and make it available to everyone
                                                                           
                                                                Pam Johnson
                                       Director, Star Schools Project, Iowa


BUILDING THE INFORMATION INFRASTRUCTURE THE EASY WAY 
Fund the Network with Public Bonds - Keep Existing Universal Service System

Washington, DC--The competition of ideas on telecommunications infrastructure
took another series of jagged turns last week as Senate democrats released
their draft legislation proposals. Altogether, this competition now includes
a draft offered Feb 1, 1995 by Sen. Larry Pressler (R-SD), Chairman of the
Senate Committee on Commerce, Science and Transportation [Fins-SR3-08],
another draft offered by minority democratic leader Sen, Ernest Hollings
(D-SC), Feb 14, 1995, and a telecommunications bill [H.R. 411] introduced 
Jan 4, 1995 by Rep. John Dingell (D-MI), ranking member of the House 
Committee on Commerce.  Remaining undisclosed is an expected 
telecommunication proposal from the republican leadership of the House 
Committee on Commerce Chairman Bliley (R-VA), and Subcommittee on 
Telecommunications and Finance Chairman Jack Fields (R-TX).

     Speaker Newt Gingrich previously floated his own ideas on this subject
in a one-day conference of would-be-cyberspace Robber Barons convened Jan 11.

Gingrich think tank, the Progress and Freedom Foundation, brought out an old
draft of their "Magna Carta of the Knowledge Age," calling for sweeping
removal of all controls on telecommunications [Fins-SR3-02; Fins-PaN-18;
Fins-NC3-02].  Promised revisions have stalled, and no draft of any serious
legislative proposal from the House leadership has appeared. 

     All the politicians are lined up to the alter of "competition" looking
for ways to tear down the regulated structure of the telecommunications
industry that has served the nation during much of the past century.  But no
one even seriously pretends to have a clue how to do this smoothly without
threatening a greater level of monopoly and oligopoly control both over
information and telecommunication by industry moguls, together with runaway
increases in prices for most telephone users as the old universal service
system is dismantled and politicians try to put it together again in some
form for the future.  A "rigged and lopsided competition on ideas" has been
the traditional way things are manipulated by business groups in democratic
nations like the United States according to the classic study on Politics and
Markets (1977), written by Yale professor of political economy Charles E.
Lindblom.  That is the way legislation for the National Information
Infrastructure is being formulated in the U.S. Congress.

     Nevertheless, the U.S. Congress is not the United States and something
quite different is occurring out in the midwestern State of Iowa.  A simple
but astounding idea (by customary political thinking in the nation's
capital), was advanced by Pam Johnson, Director of the Star Schools Project
in Iowa: "We ought to treat the fibre optic system just the way we treat our
roads--support it with tax dollars and make it available to everyone."  The
idea had such appeal to conservative midwesterners that that is exactly what
the State of Iowa has done, under the leadership of Iowa Governor Terry E.
Branstad, who was awarded with the Sony Creator's Award, Feb 8, 1995, for his
vision for Iowa's technological future that has propelled the state into the
21st century.  Carl Yankowski, Sony Electronics' president and CEO said at
the award ceremony for Governor Branstad that "True leaders encourage and
inspire people to move into unchartered territories so that they may
ultimately enhance their current lives and future capabilities.  The governor
is one such leader."

     "We've Seen the Future: It's in Iowa," says an article appearing in the
Dec 19, 1994 issue of Newsweek.  This is "A State that is really wired,"
Newsweek adds in a second headline.  Network World, a leading technology
publication, reported in the Nov 21, 1994 issue, the 10th Annual Users
Excellence Award to the state of Iowa for its "high speed network that now
serves as a model for other states and the federal government."  The 3000
high-speed fiber optic network was constructed by MPS Network Technologies,
after private telephone companies failed to deliver a viable proposal to the
state for construction and management of the network. The Iowa Communications
Network (ICN) is now carrying all forms of communication traffic: distance
education, telemedicine, government information/services, data such as
computer networks, voice and telephone.  Authorized users include Iowa Public
Television, Libraries and state government agencies, 15 community colleges,
3 Regent Universities, private colleges and universities, and all schools. 
1994 legislation authorized more users including Hospitals and physicians,
clinics, Iowa judicial and corrections systems, Federal agencies and U.S.
Postal Service (provided they fund their own use).

     Instead of using the telephone company's net, with upfront costs of more
than $200 million, the state paid MPS Network Technologies to built their own
backbone network at half the cost, saving $100 million.  In addition, current
operating costs of the system are about $500,000, half what AT&T would have
charged according to Tony Crandell, network administrator.  Funding for the
ICN infrastructure was obtained by the state issuing $114 million in
certificates of participation, or bonds that must be paid back in 14 years,
said Paul Carlson, interim ICN operations manager.

                                 * * * * *

     Meanwhile, draft telecommunications reform proposals in Congress would
dismantle the existing universal service system without solid assurances of
the viability of what would replace that system other than dubious propaganda
about the glories of competition.  The universal service system is a critical
compontent of the telecommunications network at present, however, and
uncertainty about its future has a number of people concerned.   This system
is the fiscal foundation for the local telephone exchange system that serves
local residential as well as Long Distance users.  It also provides a
framework for realizing the fundamental tenet of U.S. telecommunications
policy, provision of a basic level of telephone service at affordable rates
to all Americans, in urban and rural areas, and for rich as well as less able
residents.  Moreover, the same system is the basis for assuring ubiquitous
access to advanced services touted by Vice President Al Gore that would be
included in the "information superhighways."

     Mike Roberts, Vice President of Educom, told FINS last week in a
conference over the Net that their basic position on behalf of the university
community with regard to universal service is to "keep [the] existing system
and extend it to all providers of transmission services - with credits and
offsets to avoid double counting where multiple providers are involved." 
Educom is an association of American colleges and universities with common
interests and programs in the fields of computing, networking and information
technology, with a membership of some 600 institutions.

     Roberts was responding to an inquiry by FINS, to determine Educom's
assessment of various draft telecommunications bills [described above] that
are now in play.  After checking the texts of all the draft bills, Roberts
explained that the old goal of universal service--to get everyone on
telephone network--is essentially accomplished [with one noted exception].
As a result, what the government should do, Roberts said, was "redirect
priorities for use of the generated funds to two major areas - (1) leveling
network access charges on a nationwide basis [the long distance providers
have gone much of the way toward this already], and (2) create incentives for
upgrading of today's basic analog network access to digital network access,
using best available technology.  One thing the government should not do, he
stated, is "spend money on dead technology like 64kb ISDN [integrated service
digital network, a digital service designed to replace the existing analog
network advocated by the Electronic Frontier Foundation].

     Roberts noted that the National Telecommunications and Information
Administration (NTIA) has stated that "about 5% of households don't have
telephones."  Roberts observed that "My personal view - not Educom's - is
that since voice service is available to the poor in most parts of the
country at highly subsidized rates - as low as $1/mo in DC - the reasons for
lack of phones have to be dealt with by techniques other than subsidies
internal to network access rates and charges. In some parts of the country,
this is being done." 

     The Educom official also stated that the government should not try to
extend the reach of universal service to network servers or clients or
applications at this time.  He offered two reasons for this recommendation:
(a) this area has never been regulated and current players will loudly
oppose bringing it under any kind of universal service jurisdiction or
oversight; and (b) the Internet environment of public and private services
is changing so fast that no one, even the most agile private sector players
could up come with a credible game plan to that would produce measurable and
sustainable benefits to the public.  Roberts added "I'm not saying don't do
this, just don't do it now and don't do it until we know a lot more about how
much money would be required to produce how much benefit for how many
citizens."

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