Issue Two

ET Manifesto: Think Globally, Act Locally, Stimulate Investment and Imagine the Possibilities

The following talking points were originally presented at a Government Technology Executive Forum in Phoenix, Arizona USA on April 6, 1999.

Theme: Carrier oversight policy (via regulation) hasn't proven to be a driver of investment in local telecom infrastructure. Carrier recruitment and retention policy (via incentives) will shape the future telecom infrastructure landscape in the United States. Custom developmental strategies and tactics will be required for each unique marketplace.

Embracing Electronic Commerce (solving the retail sales tax dichotomy): The American National League of Cities appears to want a tax on internet-based commerce transactions and/or internet services (they say to protect local retailers), but some U.S. direct marketers say they will be forced to move their operations across the border (in order to compete in the Global Networked Economy). Rather than place U.S. companies at a competitive disadvantage, federal, state and local government will need to seek creative ways to retain future sales tax revenues. Can your community use "local Internet portals" to stay competitive and relevant?

Marketing Infrastructure vs. Taxing Infrastructure (how municipalities will compete): Forward looking municipalities are concerned more with utilizing a local telecom infrastructure investment to market and promote their community, not merely use it to generate right-of-way taxes. One-size-fits-all ordinances and associated policy positions don't take into consideration the challenges of rural America municipalities. Unlike metropolitan communities, rural communities will need to use attraction and incentive programs (in the absence of federal or state subsidies) to ensure appropriate telecom infrastructure investment. In the future, how can we inform our local political leadership to seek results-oriented solutions to enable -- not inhibit -- further telecom investment?

Local Cable TV Rate Regulation (channeling profits back into local investment): FCC jurisdiction over cable TV prices is ending. The price of cable services is reported to be rising at four times the rate of inflation. As revenues grow, your local cable TV companies may consider increasing their investment in local infrastructure, if they are given a compelling incentive. What can local municipal government leaders do to create public policy that encourages reinvestment of locally generated future cable TV profits? Infrastructure upgrades of cable TV plant to support telecom services may be the only real potential source of facilities-based telecom competition in America's most remote or rural communities.

Wireless Local Loop (realizing the promise of new technology): CLEC companies like Nextlink, Winstar and Teligent are now launching their wireless service offerings throughout America. Their adaptable technology enables them to cost effectively deploy infrastructure to reach our under-served markets. But, do they have an appropriate incentive to target a broader marketplace than traditional wireline competitive access providers, or will they merely choose to "serve the over-served" (large business customers in metro area commercial zones)? Will each successive new telecom infrastructure technology follow the same duplicative path, or can we foresee future public policy that will allow telecom carriers to profitably address the needs of under-served inner city or rural constituent groups who currently lack any choice or options.

Public Ownership of Telecom Infrastructure (when, and if, it's viable): Some adventurous rural municipalities in the U.S. have already resorted to financing, constructing and managing their own (public-sector owned and operated) telecom infrastructure. Concerned that their communities could potentially experience adverse consequences from being left out of the race to wire America's cities and towns, these municipal leaders have cast their vote in favor of extending the concept of "municipal public works." Yet, given the recent news of the outsourcing of the pioneer CALNET project (in California) to private carriers, some telecom industry observers are wondering if the burden of ownership truly outweighs the benefits. Has national telecom public policy really failed rural America? How can we shape regional or local policy to foster public/private cooperative investing to yield the greatest social and economic results in America?

A Model for Strategic Foresight (learning from the Osprey): Coming from an telecom industry with a one hundred year proven legacy, we shouldn't be surprised that government leadership often looks to the predictable past to identify possible solutions for an uncertain future. But, with technology that constantly changes our reality as we know it today, successful regional and local government leaders must strive to imagine their community's role in the new social and commercial order being created by the global Internet, then work backwards to connect them to their present position. Rather than ponder on the limitations of existing social or business models, or the constraints of artificial boundaries, perhaps we can look to the future and envision a borderless economy where all American communities can realize a better tomorrow -- enabled by their cultivated world-class local telecom and ICT infrastructure.

David H. Deans
Founder
Economic TeleDevelopment Forum