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Broadband Planning and How Government Creates Markets - Community Broadband Bits Podcast 260
Just what does it take to have a market? It may be more complicated than you think -- and in large part because of the things most of us don't notice that governments do. We discuss this and the role of broadband planners with Alex Marshall on Community Broadband Bits podcast 260.
Alex is the author of The Surprising Design of Market Economies, a columnist for Governing magazine, and Senior Fellow at the Regional Plan Association in New York City. In the course of our conversation, he notes the Portland Speech from President Franklin D. Roosevelt.
One of the highlights of our conversation is comparing roads to broadband in terms of benefits, how they are funded, and the danger from over zealous tolling. We strongly recommend Alex's writing as it has been quite influential in our thinking about municipal infrastructure over the years.
We want your feedback and suggestions for the show-please e-mail us or leave a comment below.
Listen to other episodes here or view all episodes in our index. See other podcasts from the Institute for Local Self-Reliance here.
Thanks to Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license.
Alex Marshall: Broadband is a type of infrastructure. So, it's a planner's job to think about how do we develop a system and to have the citizens connect to the system.
Lisa Gonzalez: This is episode 260 of the Community Broadband Bits podcast, from the Institute for Local Self-Reliance. I'm Lisa Gonzales. Author, journalist and fellow, Alex Marshall visits with Christopher this week about broadband as infrastructure. They also discuss the role of planners, as broadband has transitioned into a necessity for economic development, education, municipal services, and many other critical uses. Before we get started, we want to remind you that this commercial-free podcast isn't free to produce. Take a minute to contribute at ILSR.org. If you're already a contributor, thanks. Now, here's Christopher with Alex Marshall.
Christopher Mitchell: Welcome to another edition of the Community Broadband Bits podcast. I'm Chris Mitchell and today, I'm speaking with Alex Marshall, an author, a senior fellow at the non-profit urban planning organization, The Regional Plan Association, and that's in New York City, and a columnist for Governing Magazine. All in one person. Alex, welcome to the show.
Alex Marshall: Thank you. Nice to be here.
Christopher Mitchell: Alex, you and I have gone back and forth for a lot a years, actually. You came in town, one of the places you visited and promoted your book, The Surprising Design of Market Economies, a book that I whole-heartedly recommend. And I think we're going to talk about that later in the interview, but first I wanted to ask you more about planning. You are a planner. You do a lot of thinking about planning. You write about this sort of thing and the role of broadband within planning. Maybe the best place to start is just what's the historic role of planners been within the relation of broadband?
Alex Marshall: Well, I think planners tend to view it correctly as another form or branch of essential infrastructure. So, it is the duty of planners to think about infrastructure and what are the systems we need, how should it be provided, where should it be laid out, what are the systems. Good planners think about that and have different answers to that. I'm just preparing to give a talk out in Los Angeles next week, which is a conference on infrastructure. I was just thinking of a line that a transportation planner said once a long time ago that I liked. He said, "Transportation is a system. You can't have a little bit of transportation." And I think that applies to infrastructure. For infrastructure to be infrastructure it has to be a system. You can't have a little bit of infrastructure. And broadband is a type of infrastructure. It needs to be a system. And so to that extent, it's a planner's job to think about how do we develop a system. What's the best way to have a system and to have the people, the public, citizens connected to the system?
Christopher Mitchell: When we think about that sort of system, what are the daily things that planners do that will impact how a system is developed or conceived of, or how it would impact my daily life that a planner is thinking about these things in a better way or a worse way?
Alex Marshall: Planners work for various people. There are non-profit planners, such as the organization that I'm part of, The Regional Plan Association, who basically do studies and then lobby to get them done. But there are the planners that work for all levels of government, and their actions often have eventually have more of a force of law where you either implement laws or work with legislatures or city councils to have plans in place that actually make it possible or deliver service directly, or make it possible for service to be directly. With broadband, it is mostly at the city level, but the planners are often a key interphase between providers of broadband and the public. They help decide how that's going to happen, how that's going to be provider. And they can either facilitate it or make it more difficult and have a say in who's providing it.
Christopher Mitchell: I get a sense that, considering that I just spoke at the American Planning Association recently in New York City, that planners are really getting excited about being more involved with broadband and recognizing that they have to get involved. And I'm curious if you have an advice for some of these people who are excited and are trying to figure out how to plug in, regardless of where they might be. What are some of the things that planners should be thinking about right now?
Alex Marshall: I think planners should be thinking about who's in charge. Who controls and who owns things. There is a tendency, sometimes, among planners, as there is among the general public, to have subject list sentences or subject list thoughts. You sort of say, "Well, this broadband is really great. Let's help spread it," or "Let's help have some good planning for it without totally talking about who's in charge," basically. Is the private telecommunications company? Will it be the city? If this isn't essential technology, who is owning it? That's always a good question. Who owns it? Who controls it? To keep those questions foremost in your mind, if you're a planner, is a good one because if the public is not ultimately in charge, then usually you're going to have some problems.
Christopher Mitchell: In presumably, one of the ways the public could be in charge would be to, not only building a municipal city-wide network, which you've written and, like me, you support the ability of cities to decide for themselves if that's a good decision, but also planners might be responsible for ensuring that a city is a deploying conduit and, perhaps, fiber optics in ways that would lower the cost for a new entrant to come to town, or something like that.
Alex Marshall: Cities help basically establish the marketplace. Is it an open market? Is it a market where only one or two players can be? Does the city provide some of the services and then business comes in. As I say in my book, Surprising Design of Market Economies, the arenas that businesses operate are instituted by government, so we should think about what kind of arenas or public squares or business squares the governments are doing.
Christopher Mitchell: It's a good connection to what I really wanted to jump into with you. And that is this idea of the surprising design of market economies. And I'll throw at you something that I hear a fair amount of, which is that if government would just get out of the way, we would see markets work amazingly well and we wouldn't have broadband problems. And I'm curious how you respond to that common notion.
Alex Marshall: Thanks for throwing me that softball in a way because I did write a book about that. It's basically just a misunderstanding of how markets work. You can't have markets without government. So, asking government to get out of the way so business can do its job is kind of nonsensical. You can't actually have business without government. You can have property. They all depend of government, basically. Warren Zevon had the song, to have markets you need "lawyers, guns and money." You have a government that's involved in every step of the way. It's not only a referee for fair play, but it also lays out the playing field and decides what the goals are and where the lines are, and on and on and on. These are all public choices. We often miss what government is doing in the areas that it does it so well, we just don't think about it. Property rights, they actually work relatively well, most of the time, so we don't really think about the fact that these were all based on laws that say who owns what, how you own it, what happens when someone else says you own something. A lot of physical infrastructure that we depend on goes back to government and, again, we just don't tend to think about it when it works well.
Christopher Mitchell: One of the things that I think people really never really think about is just the idea of the corporation. And the idea an entity that has limited liability and can live forever and has a number of benefits that, frankly, allow certain kinds of businesses to do very well. I'm not talking about just big corporations. I'm talking about the ability of people to turn into a corporation and then do things. I'm curious if you can just tell us a little bit about that idea.
Alex Marshall: Yes, yes. Corporations is another great example. We've gotten so use to them, we just accept them as if they are laws or nature. Act like they've always been there. Ironically, they often become a symbol of private enterprise. But, a corporation is a creation of government. Someone called it a "mini republic." It's a grant of authority and a grant of special powers from the government and that is done through something called a charter. A government of some type issues this charter, a state, usually, or the federal government, and they create something called a corporation that has these special powers. Originally, they were only granted for public purposes. They would be like a university, or a monastery, or building a road. In the 19th century, they gradually became opened up to just purely for profit enterprises. Then, eventually, got granted that you could do it just by right. Anybody could start a corporation. You used to have to get a special authorization from the legislature. We've forgotten that these corporations that we talk about, from Apple down to a little neighborhood corporation is created by government. We, the people, who control the government, can change those rules, redesign those charters, redesign those powers they have. They've been, in a lot of ways, very effective tools, corporations. But, I think it would be better if we remember that they're ultimately creations of the people and answerable to them.
Christopher Mitchell: One of things that I often think about when people say, "If government just got out of the way," I think it would be interesting if Comcast had to negotiate with every land owner to put a utility pole in their property. You can imagine the kind of patterns that might exist when you have perhaps ten properties in a row and two of them say, "No." Comcast has to detour around the neighborhood to try and find landowners who are willing to give them, at a reasonable cost, access to put a pole in their yard. Just things like that I think people just take for granted.
Alex Marshall: Yes, exactly. For infrastructure, it's always done in the public right of way. It's either done through utility poles or in the streets. If government got out of the way and said, "Look, we're getting out of the way. We're not going to allow you to use our streets because we don't want to impede you," and then they had to buy up their own right of ways for all their line. It would be completely unworkable. So, again, the idea of government somehow getting out of the way doesn't even really make sense.
Christopher Mitchell: What I want to engage you on related to in to your book. You talk about roads and the gas tax. I feel like roads are often used to discuss broadband systems as a comparison. And I think it's a very good comparison. I'm curious if you would agree that roads and broadband have a lot of commonality.
Alex Marshall: Tell you what I think about roads and then we'll see if we can reach broadband. I think roads are pretty neat because they're mostly an example of government doing its job really well. The roads and street systems in this country, whatever their flaws, mostly work really well and we don't even think about. It's an example of, basically, pure socialism, really. Government owns all the streets. They're mostly paid for through taxes not user fees. It's like 90% through just taxes of some sort. And I walk out my door here in New York City and no one charges me to walk down the street, or to ride a bicycle on it or drive a car, or walk on the sidewalk. It's just open to anybody. And it's a system. It's a network. It's not a little fragmented thing. You don't have different streets owned by different people or different roads and you have to pay each one. It's an example of government doing its job really well. Laying out a system, charging it through mostly general taxation. It works pretty well. I mean, there are obviously ways it could be improved, but I would like to see broadband something similar, where the government lays out the municipal fiber networks. The analogy is not exact. You probably would have to charge something. I would like there to be system on broadband that functions as well as our road and street network.
Christopher Mitchell: Well, there's a couple of follow ups and one you noted, which is why the gas tax not a user fee?
Alex Marshall: That's something I love to talk about because it does, at first glance, appear to be a user fee. You go, "Well, I go up to a pump and put some gas in and drive away, and then I use the road. So, it's kind of a user fee." But, it's not really a user fee because it's not connected to any particular street. I compare it to what if every time you went shopping for groceries, you paid a tax on avocados, and then government could use that in any way it wanted for the agriculture system or even something general. That wouldn't be a user fee. It's just a way of taxation. And it's similar to gas. It's just a system the government has of taxing. It's not a user fee because it doesn't relate to any one road.
Christopher Mitchell: Right. I think that's a compelling argument. One of the other things I think about is that the roads were developed before we had technology that was capable of, basically, tracking any individual or any piece of equipment that uses the roads and, perhaps, charging them a pro rata share of their use. I think some libertarians would think this would be great. Then we could actually charge the roads appropriately. And I'm curious how you react to our ability to do that. Should we take advantage of that now?
Alex Marshall: With caution, that's to say we should take advantage of that with caution. Oregon has been experimenting with a program where you do have little things in your car and it would rate how much you use the roads and then charge you accordingly and, I also believe charge you higher when there's congestion. All of those actually do have some potential, but you have to be careful because infrastructure has wide benefit to people as the public, as the state. When you do something like build a road network, you want it used as widely as possible. You just put a lot of money into this. And you want it used widely. You don't want everyone thinking twice before they step out their front door. So, generally, actually you don't want to charge for the use for any kind of infrastructure, unless it's overused. Unless it's congested or you need to ration it somehow. Libertarians usually don't understand this basically. We've gotten so into the rut of thinking, "Oh, you charge for services. That's efficient." They don't understand the logic of basic infrastructure, actually, as it has a different logic. It's that we, as a society, benefit when we pay for this service or institution generally, and then have it used as widely as possible. Education is another big example. We decided 150 years through a big, long, dragged, drawn out political fights that everyone would have a right to a public education, and that we as a society work better when people know how to read and write. We don't say everyone has to pay at the door to enter a school, and that if you can't, then you can't come in, and that the schools have to survive solely on those fees.
Christopher Mitchell: That's actually one of the other things I think you point out in terms of one of things government does that people don't notice is creating an educated work force for the market to be able to take advantage of. I don't want to get sidetracked. You led me right back to where I wanted to end up with broadband because there's that issue of when we worry more about who's paying and if they're paying for their fair share when there's congestion and overuse. With modern broadband networks, we don't really have to worry about that as much. If we need more broadband, it takes a little bit more electricity. It doesn't take to put in a bigger router, or something like that, with a fiber network. We don't need to go mine more coal or dig new water wells. And this is an issue that has been interesting to me in that even the municipal networks that you and I often support, they have more or less just adopted the cable model of trying to figure out how to make individuals pay. There's these tiered plans to try and make people who use more pay more, and sort of complicated. And one of the downsides of that is that low income households find it difficult to afford access.
Alex Marshall: Yes, that's probably a big mistake, basically.
Christopher Mitchell: But the reason I compare it to roads often, is that people don't realize how much of the roads were built by tax payer dollars, and it makes sense to do that. I think that because there is a cable and telephone industry that government should not just steamroll because many of us are frustrated with our service. We actually have a situation in which I could see Americans in many cities supporting using general tax payer dollars to build open fiber networks that would enable multiple business models to use them and lower the cost of entry so we could achieve numerous ends. But, I feel like this metaphor of the road is important for making that point.
Alex Marshall: I think you've actually come up with a better frame work than me. In a way, you think of the roads or the broadband fiber optic network as the streets. Maybe the cable companies would be the car companies. Government builds the roads and the car companies build the cars, and you buy the cars if you want to use the roads. Does it sort of hold up if the govern could build the fiber optic networks, and then various companies could actually bid or even operate on the same network? Does that hold up?
Christopher Mitchell: Right. Yes, there's multiple ways of doing it and, in some ways, it's actually, again, analogous, in that you could even imagine the public operates transit service next to buses. You can imagine services that are aimed at different audiences. Some are private, some are public. But anyway, I think one of the things that we have to come back to is thinking about infrastructure more broadly rather than just thinking about internet as this thing we got from cable and telephone companies narrowly.
Alex Marshall: Yes. Something I keep getting excited about is the comparison to electricity back in the 1920s and 30s, when people were aware that electricity was not just an amenity. It wasn't just something that made life better if you could get it, kind of like internet in the early days. It was actually essential. There gradually became these big fights about who was going to provide electricity, and similar to internet companies now, telecommunications companies, there are people who begin to resent the power companies who felt like they were providing bad service at a high price and not rolling it out very quickly. And when they did roll it out, charging too much for it.
Christopher Mitchell: Just to jump in briefly, of course. The cycle repeats itself because the gas lighting companies were the enemies at the end of the 1800s, and electric companies were seen as delivering people from that horror.
Alex Marshall: The tyranny of the gas companies who were, of course, laying their pipes, again, in the public streets. Power has some good results in some places. Some cities and towns manage to get public power, and they generally, still today, operate better than the ones who don't have it. There are very small places, like Wilson, North Carolina, and there's very large places like Los Angeles. The government provides electricity and it seems to work well and to be stable. And now many of those same towns that have public power, it's relatively easier for them to start offering broadband as well, to lay out fiber and to use their existing customer base and booking systems to do all that. But, it's a political issue. I would like a see a presidential candidate campaign on this the way Franklin Delano Roosevelt did in 1932. He was very open about it and very strong. He gave a famous speech in Portland, Oregon in September of 1932 where he very strongly came out in favor of public power and basically said if private enterprise can't do the job, then it's a duty of government to step in and do it. Such a great speech because he talks so clearly and boldly. It's a real model of a great speech. I encourage any of your listeners to look it up. The Portland speech by Franklin Roosevelt.
Christopher Mitchell: Yes, I've read it and I wholly second your endorsement. As we finish up, I want to make one more note, which is a note that I'd made when I first read your book a few years ago. And that is, one other thing that government does that many of us forget about, and it's really important as we deal with the idea of bandwidth caps because this is a question of who measures and how accurate is that measurement. We've seen some of the cable companies that have these caps saying, "All right, well you've hit your limit," and sophisticated technical people will say, "I've been measuring my data usage and I'm nowhere near my limit." One of the things government does is make sure that measurements are fair. You had noted that whether you're talking about a meter or a yard or a liter or a quart, whatever, we know that a liter is a liter in New Orleans as well as in San Francisco, and a quart is a quart no matter where you go because of government.
Alex Marshall: Yes, that's, again, a fascinating thing. These things we don't even think about and, which people take for granted, that the reason we have standard units of measurements, and a pound or meter is the same wherever you go is because government actually, at one point, actually created a standard of what a pound is, or what a yard is, or meter. And actually in the case of yards and pounds, they actually created these golden yard sticks that were super expensive and stored in Washington. Then copies were made of that and then distributed around the country. It doesn't just happen.
Christopher Mitchell: Well, thank you for coming on this show and, I think, opening people's eyes. And I hope that some of these folks will check out your book because I think about it on a regular basis as I'm doing this work.
Alex Marshall: Well, that's great. Thank you very much, Chris. And keep up your really good work. You and your organization are real assets to this country. So, keep it up.
Lisa Gonzalez: That was Christopher with author Alex Marshall. Be sure to check out Alex's books at your local independent book seller. He's released several titles, including The Surprising Design of Market Economies, Beneath the Metropolis: The Secret Lives of Cities, How Cities Work: Suburbs, Sprawl, and the Roads Not Taken. We have transcripts for this and other Community Broadband Bits podcasts available at MuniNetworks.org/broadbandbits. Email us at podcasts@MuniNetworks.org with your ideas for the show. Follow Chris on Twitter. His handle is @CommunityNets. Follow MuniNetworks.org stories on Twitter. The handle is @MuniNetworks. Subscribe to this podcast and all of the other ILSR podcasts, Building Local Power and the Local Energy Rules podcast. You can access them on iTunes, Stitcher, or wherever else you get your podcasts. Never miss out on our original research by also subscribing to our monthly newsletter at ILSR.org. Thank you to Arne Huseby for the song, Warm Duck Shuffle, licensed through Creative Commons, and thanks for listening to episode 260 of the Community Broadband Bits Podcast.