With CrowdFiber all set to launch next week, I felt it was an appropriate time to communicate the background and inspiration for this project. After next week, we will shift into the day-to-day business of helping organizations create campaigns, supporting new customers, and building a new business. Best to get this down in writing before things get too hectic.
So, I’ve spent the past decade working on broadband projects within the consulting business I started called Civitium. During that time, I’ve routinely found myself at the intersection of two worlds – communities and service providers – as they’ve worked to achieve their goals in this area. Despite lots of smart people, creative ideas and hard work, I eventually concluded that there was a limit to how aligned these groups’ interests could ever be.
The “shareholders” in communities, including elected officials, economic developers, community organizations and others, wanted broadband to be ubiquitous and abundant. On the other side, service providers were bound by their commitment to their shareholders, a system that depends on them to maximize the returns on their invested capital. It’s no secret that sometimes scarcity markets produce the best returns.
Sure, there are a few examples of public-private-partnerships where a happy equilibrium has been reached, but these are really the exception. Sometimes you just can’t align interests that so directly conflict with each other. So, I kinda got tired of trying, and started trying to imagine fresh new approaches that might open new doors.
Here were my inspirations:
PCs, Internet, Mobile, Social
I’ve always been fascinated by the democratizing forces that certain technologies represent, and the cultural, societal and industrial changes that are caused. Like many in my generation, I first got a taste of this with the introduction of personal computing in the 80s. PCs allowed people for the first time to collect and codify their thoughts, ideas, expressions — and information was turned into data.
A decade later, the commercialization of the Internet allowed people to connect these personal islands of data together and share all the new digital content they’d created. And the introduction of mobile devices and the evolution to 4G networks naturally extended this along the dimensions of time and space.
Fast forward another decade and social networks were born, allowing people to move beyond simply connecting their computers and into the world of connecting themselves, leading to the hyper-connected relationships that now exist.
This led to my first conclusion – that whatever idea we pursued would have to exploit the building blocks above, and would have to empower lots of people and organizations to do something meaningful.
Crowdfunding – Democratized Finance
Now we are in this new post-social, hyper-connected world, and we’re in a new decade. I spent a lot of time wondering what the democratizing forces are this time around. Open source hardware is a big deal. 3D printing is out there. The Internet of things. The maker movement. Probably some others that I can’t think of right now.
But there’s another movement underway that’s climbing the hype cycle at the moment – although it doesn’t typically get thought of in this broader context — crowdfunding. I first heard my friend (and friend-of-the crowd) Amy Cortese with Locavesting refer to crowdfunding as “democratized finance” and that really stuck with me.
Clearly, broadband networks are capital intensive to build, so the idea that there could be a new source for at least some of this capital – and new methods to tap into it – was intriguing. Sustaining these networks also requires a steady, stable, dense base of paying customers, so incorporating some of the innovative approaches to civic/neighborhood engagement and advanced demand aggregation – notably with Google Fiber’s efforts – seemed to be part of the equation. This seemed to have implications both for community organizations and service providers, so another piece of the puzzle was in place.
Cathedral and the Bazaar
In 1997, a guy named Eric S. Raymond penned an essay called The Cathedral and the Bazaar. The essay came out of his observations about the community-development process behind Linux and the overall trends surrounding open source software development. It also examined the struggle between top-down and bottom-up design. The paper stuck with me, and the phrase became an often-used metaphor of mine for the struggle between centralized power/organization and peer-led efforts.
Looking back over almost two decades, you can see glimpses of the Cathedral and Bazaar in many broader technological, cultural and societal movements. The Arab Spring, blogging, social media, the Occupy Movement are a few that come to mind. Common in all of these is a dissatisfaction by one group (the bazaar) with the centralized structure of another (the cathedral). And central to the outcome of this tension is that ability for the bazaar to organize and communicate to take some kind of useful collective action.
I should clarify that I am not making a judgment about white hats and black hats here. My appreciation for the metaphor has more to do with it being a model to think about how the forces work against each other, the disruption caused, and how the trend often plays out. I’m not rabble-rousing — just acknowledging the fact that these forces move and transform markets.
This inspiration led to me realize that whatever idea we tried had to introduce new tools for communities to organize through peer-relationships and had to provide new tools for service providers to engage with those communities — and that both groups had to achieve something meaningful for their shareholders through the process. Better broadband. Better returns on investment. More sustainability for both the community and the business.
Homes With Tails
In 2008, Timothy Wu and Derek Slater published a report with New America Foundation called Homes With Tails – What if you could own your own Internet connection? The paper outlined what its authors basically acknowledged was an exploratory thought experiment at the time — the idea that consumers could own the last-mile fiber or other infrastructure coming into their homes in a sort of “condominium model.” I have always loved these kinds of mind-stretching exercises, and so, of course, the idea has bounced around in my head for five years now.
To be clear, a model like this has all kinds of complicated issues to deal with. The author’s put it this way:
“We do not suggest that this model is the panacea for broadband policy challenges; rather, it might serve as part of a broader solution. Furthermore, there are many empirical questions and obstacles to successful implementation that cannot be fully evaluated at this time. In particular, no market for consumer purchase of fiber currently exists, and there is a collective action problem in deploying a network of this sort.”
My conclusion here was that it’s important to continue pushing the boundaries for how we think about the structure of the broadband industry, ownership models and so on. As consumers inevitably become more involved in broadband as a civic matter – and local governments continue to become more active in competition-based policies – and economic developers view broadband more like roads and electricity – there could very well be innovative models that emerge where service providers, local governments and consumers all find value in restructuring asset ownership, value chains, revenue flows and other aspects of how the market works today. Debates over whether broadband will “become a public utility” are a bit too black and white for what I think is possible.
Abundance vs. Scarcity
The final area of inspiration for me was abundance vs. scarcity as it is structured in the broadband and telecommunications market. The Homes With Tails paper mentioned above has a brilliantly-written section that goes into this issue, in part saying:
“At a speech in February 2008, James Crowe, CEO of Level 3 Communications, presented a puzzle: why doesn’t Moore’s Law seem to work with bandwidth? Moore’s Law holds that the capacity of digital devices tends to increase exponentially, doubling about every two years. And since 1965 or so, it has held. Processor speeds, said Crowe, have grown exponentially, and so have other digital indicators like hard drive storage; yet, the average speed of Internet connections to the home has grown more slowly. Why the difference?”
There’s a debate going on right now in the industry around “do consumers really need a Gigabit?” People are firing back and forth about how much bandwidth it takes to watch 10 Netflix movies at one time. Contests are being held for hackers to develop applications that actual can prove they will exploit that much bandwidth. This one drives me nuts, mainly because I think that justifying an existing need for a product or service is rarely the kind of thinking that leads to breakthroughs in innovation. We are asking the wrong question.
Think about how absurd it would be to ask the following questions. Do we really need Intel or others to introduce a microprocessor that operates at twice the speed of existing ones next year? Do any existing consumer applications really exploit that much processing power? Does the federal government need to intervene in that industry to make sure that the U.S. has the fastest processors in the world? The reason those questions would be absurd is that innovation doesn’t work that way in industries where Moore’s Law rules. The model is based on abundance. Give consumers, developers, businesses and others breakthrough, abundant resources and they will find ways to exploit it and create breakthroughs — in ways that we never could have imagined when the abundant product was introduced.
So, my final conclusion was that we needed to introduce an idea and solution that promoted broadband to become more abundant, less scarce.
I might argue that this is less of a goal for CrowdFiber and more of a natural outcome if it succeeds. I certainly hope so, and I’m very excited about introducing it to you all next week to start the experiment.