Technology Futures

Back in 2000, I began promoting the idea that one way communities should finance broadband was by selling shares in a stock ownership corporation. In this way, the entire community could participate in the ownership of a Knowledge Economy business. A stock ownership approach to community broadband has several advantages.

• It can distribute ownership broadly across the entire community, truly making it a community enterprise (much the way coops have very successfully operated for decades).
• Both public and private partners can participate. Local governments that want to lower the cost of broadband for schools and government offices and services can buy into the enterprise. Private providers like ISPs can buy into the enterprise and have voting rights and representation.
• If the share price is low, it gives everybody in the community a chance to own stock. As the venture crosses the break even point, dividend distributions are returned to the owners, who in most cases are also customers.
• It allows the community to self-finance; that's a much better approach than trying to start these efforts by relying entirely on grants.

I'm delighted to see that a group right here in the New River Valley is doing what I suggested. The New River Valley Planning District Commission plans to fund a regional fiber network by selling stock to public and private partners.

The only thing I wish they had done differently would be to set the minimum share buy lower. Shares are currently priced at $11.25, and a minimum purchase of 1,000 shares is required. I understand they are trying to raise cash quickly and with a minimum of marketing, but why not sell as little as one share? Payments could be made via Paypal, and it would be easy to generate a digitally signed PDF stock certificate that is emailed to the purchaser.

There are disadvantages to having many small owners, but there are a lot of advantages, including the possibility of raising more money by expanding the investment pool. By using exclusively electronic communications with shareholders, costs can be kept low.

Another approach would be to require a minimum of ten shares, or at the current share price, an investor would have to come up with $112.50. That is still a very low barrier, and I bet lots of people in this area would love to invest in their own community, along with the opportunity to make some money as the network expands.

I remain convinced this is a viable approach almost anywhere in the country, even in distressed rural communities. Most households in America are spending between $150 and $300 PER MONTH on telecom. Why not give those households an opportunity to buy into their own future and own a piece of the telecom infrastructure, rather than leaving them at the mercy of the marketplace?

Congratulations to the NRV PDC for their boldness and vision.

New Hampshire state senators voted 22-1 in favor of HB 653, which gives local governments in the state the authority not only to create and own communitywide broadband networks, but also to use bonding authority to pay for such networks, just as communities use bonds to build other municipal infrastucture like roads, water, and sewer.

I think this is one of several models we will see emerge as a standard way for communities to undertake these projects. Bonds are a time tested and well understood financial vehicle that communities have used for decades, to build systems much more complex and more expensive than fiber and wireless. Design Nine completed a telecommunications master plan for the northern half of New Hampshire in 2005.

Jakob Nielsen, in his monthly AlertBox column, talks about what businesses need to do to have an effective Web site that helps customers find what they want. Nielsen is arguably the most knowledgeable Web usability expert on the planet, and this column is worth a careful read. Economic developers, businesspeople, and in fact, anyone with a Web site can pick up some useful tips.

Bill Gates recently scoffed at the effort of MIT and other partners to build a $100 computer for emerging markets, mostly in the third world.

I first proposed a $100 computer in 1998, but was ignored because the idea was regarded as preposterous. Gates, I think, is threatened by the thought of a computer catching on among hundreds of millions of people that does not run Windows (the MIT system uses a version of Linux).

Instead, Gates thinks everyone ought to buy a much pricier $600 tablet computer, in part because it comes with "support." Gates does not explain where the world's poor are supposed to come up with $600 or the hundreds of dollars per year that Microsoft tries to extract from its customers with upgrades and fees. He also says the world's poor should first "get a broadband connection." He also fails to explain how they would do that. It is an especially odd remark since many Internet users in the U.S. can't get broadband connections.

A small computer with the right applications would be extraordinarily useful even without an Internet connection. As I outlined in 1998, when someone first turns the computer on, it could run a diagnostic program that tries to determine if the person holding the machine can read. If not, it starts teaching that person how to read and write.

Gates also talks about the need for power hungry hard drives, but these are not essential for a first computer, and drive up the cost without adding a lot of value. One of the problems with Windows is that it is too big a piece of software to run without a hard drive, whereas Linux is available in versions that run in small amounts of memory, so a hard drive is not required.

The Gates Foundation is doing good work trying to provide health care aid to the world's poor; it's hard to understand how Gates could be so tone deaf on the technology side.

Here is a suggestion for Bill: Take a billion or so of your cash hoard and write a version of Windows that will run on the MIT $100 computer. Then give it away free. It would create a huge base of potential customers, some of whom might eventually want to buy a copy of the full version of Windows. Otherwise, stop throwing brickbats at people who are trying to do some good in the world.