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  • From: "Michael D. Thomas" <mdthomas AT mindspring.com>
  • To: "InterNetWorkers" <internetworkers AT franklin.oit.unc.edu>
  • Subject: Re: Digital cash, micro-payments and
  • Date: Wed, 1 May 2002 01:13:10 -0400


> >Rural electrification was achived in large part through local
> >co-operatives such as Piedmont Electric, which
> >serves parts of Carrboro
> >and most of Orange County.

> I thought that rural electrification was achieved through huge companies
> ability to establish a 60 cycles per second, AC standard, and government
> subsidies, funded by taxs, similar to the universal service tax on our
> phone bills.

Forsooth...

Technology_Monopolies and Pervasive_Technology_Standards are
different creatures. Each has it's own advantages and drawbacks.

In the case of GSM in Europe, a Pervasive_Technology_Standard was established
by the governments, not dictated by a Technology_Monopoly or churned out
by the market. This seems to have worked well.

I consider Pervasive_Technology_Standards (HTTP, TCP/IP, GSM) to be
generally good with a couple of disadvantages, while I consider
Technology_Monopolies (AT&T, Microsoft) to be bad with a very
few advantages.

I would rather not have Technology_Monopolies. At the same
time, I would rather not have the market churn (i.e., VHS vs. Beta)
that establishes Pervasive_Technology_Standards. Until the churn is through,
it's bad for the end consumers and adds economic costs up and down the supply
chain.

<Flashback Time="EarlyEighties">

("Do I sell VHS and/or Beta VCRs?" "Do I make my movie in VHS and/or
Beta?" "Do you think Rental shop X will have movie Y in the format
that matches my chosen VCR?")

</Flashback>

The market churn experienced in establishing Pervasive_Technology_Standards,
though democratic, causes pain until a Pervasive_Technology_Standard is chosen
by the market. In a market where the set of choices is small and determined by
a small number of entities, the churn can slow adoption rates and incur costs
for years.

Pervasive_Technology_Standards are esp. important in the wireless space. The
consumer's primary concern in choosing a wireless service is, "Will I be able
to use my wireless service in the geographic areas where I wish to be?" The
goodness of the particular standard (CDMA, TDMA, GSM, even analog vs. digital)
is secondary. It's as if one or two companies were able to dictate to everyone
in North Durham (or Mebane, or any geographic location) "You will use Gopher.
HTTP isn't available to you. Oh, you really want HTTP? Well... we'll think
about it. Or maybe someone else with big bucks will come in and build an HTTP
tower for your area after getting through the necessary regulatory hurdles.
But for right now, yes, you are screwed."

Thus, I applaud the GSM standardization seen in Europe. Is GSM perfect?
Of course not. Was there a lot of political intrigue at the time of
the establishment? I'm sure.

But now Europe is *years* ahead of the U.S. in the development of wireless
services. Unlike in the U.S., you simply don't have the interoperability
problems of several competing transport protocols. Also, wireless does
use community space (the air) so it is perfectly reasonable that it should
be regulated.

(This said, it seems that the wireless market will always be fragmented
b/c of PDAs vs. phones. Form factor criteria will keep those two classes
of devices distinct.)

I'm a big fan of the "Invisible Hand of the Market," but often it is giving
all of us the finger.

Esp. in the establishment of tech. standards, it sometimes does this for
years.

Sometimes it needs, well, a hand.

Though I'm not generally a fan of government regulation, sometimes a
little well-thought-out regulation can go a long way.






  • Re: Digital cash, micro-payments and, Michael D. Thomas, 05/01/2002

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