The Charleston Daily Mail published an interesting article today that illustrates the difficulty of meeting technology needs in a political climate. The article explains that much of the $126 million in federal stimulus money leveraged for broadband is going to Verizon to build something being characterized as the “middle mile.” The “middle mile” will get close enough to rural communities that other companies will step in to build out the “last mile” to customers’ homes and businesses, or so the theory goes. And guess what? Verizon will own the “middle mile” circuits that the federal government is paying $126 million to install.
Is that wrong? Something doesn’t seem right, but I am unsure. Some thoughts and then a history lesson:
First, the thoughts:
- A lot of money will have been wasted if no one actually installs the “last mile,” but it’s possible that the “middle mile” truly is a larger barrier to broadband access than the “last mile.” I do not know.
- Why would the State turn over millions of dollars worth of infrastructure paid for with federal dollars for free? Strangely, this is the public sector equivalent of Dow’s $10 million “gift,” but makes far less business sense than Dow’s financial move. Why not at least put the new network infrastructure out for bid to see if someone thinks it has a value of more than $0 and then use any funds generated for additional broadband expansion?
- While I question the choice of Verizon, I do realize that it is easier (but possibly not cheaper) to deal with Verizon, the telecommunications Goliath, than a large group of Davids like FiberNet, CityNet and Ntelos.
Second, a history lesson: In the late 1990s, Verizon convinced State government leaders that the wave of the future was asynchronous transfer mode (ATM) technology. So the State ponied up $1.5 million per year for all kinds of educational institutions and state government agencies to get the new ATM circuits through the WV2001 Project. Verizon effectively wanted to hedge its ATM bet, and the State of West Virginia was more than happy to comply. But guess what? ATM were not the wave of the future. Verizon and its partner the State of West Virginia bet wrong.
Why was the State happy to comply with Verizon’s request? Verizon is very powerful politically, and no one, including skeptical state technology officials, were about to stand in its way. Given the powerful technology interests out there and their willingness to use their political power for financially beneficial ends (and I don’t blame them for that nor expect them to behave any differently) and given the large amounts of money spent by the State on technology, we need technology agencies that are very stable and insulated from political influence. In 2000, then Chief Technology Officer Sam Tully thought that entity was WVNET and transferred control of much of the State’s telecommunications infrastructure to WVNET.
The rarely-studied lessons of history are intriguing.