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Week of December 14, 2008 - December 20, 2008

Every macro is a sum of micros


Brad DeLong asks what is the sector of the economy that can attract new investment? Alternative energy generation and distribution is the answer. Approximately one trillion over the next ten to twelve years, please, should buy us energy independence, abatement of global warming and huge new job growth.

Once Again Duncan Black is Absolutely Right!


So says Eschaton: "Lucky that few understood the potential and didn't try to legislate or regulate it out of existence before it took off. Imagine telling senators in 1992 that soon every 13 year old would have a porn machine on his/her desk."

Well it was 1994 mostly, but we didn't mention the dark side to the senators and besides we were told by Andy Grove and Eric Schmidt and Marc Andreessen (who wore bib overalls and no shoes in the first meeting) that the upside case was worth the risk on the downside. So to summarize: yes. Saying yes to everything is a not bad first principle for conducting life as we know it, subject to having an exit strategy.

This one time Duncan Black is wrong


Says Eschaton: "The open internets was a bizarre historical accident, necessary to defend and unlikely to be repeated. People always object when I say this, but they're wrong."

But the open Internet as an experience and an ideal came from the decisions of the Federal Communications Commission, dating back to the 1980s and but most particularly in the salad days of Internet 1.0, aka dial-up circa 1990s, when we dinosaurs roamed the halls of the government and had our common carrier paradigm followed by the network-owning telephone companies. The Internet was open, cheap and widespread, because we said so. It was one speed because phone lines were all the same.

Then the FCC, with Congressional support, adopted unbundling and competition was the key to open: in a competitive world no one firm could successfully adopt closed as its business model. Those that tried, failed.

But the 00s brought a series of FCC decisions that repudiated common carrier as to data links, and encouraged consolidation, repealing unbundling, abandoning the goal of widespread high-speed connectivity, and changing open into an open door toward collaborative special deals between big content and big conduit. This is a history lesson for those too young or too concerned with other matters to have lived or learned these arcane facts.

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Reed Hundt

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