Dumb Pipes Need Smart People (and money)
The Electric Reliability Council of Texas (ERCOT), the power grid people, recently asked the Public Utility Commission for permission to raise wholesale rates to the tune of 34%, which would roughly translate to an average of $9 per customer impact. So you ask, “what does this have to do with telecom?” The answer is simple, networks have to be upgraded. Furthermore, this is not just a “we need more capacity” moment, but a monopoly organization asking to innovate. You see, Texas power runs on a grid that is managed on a regional basis today. Ebbs and flows go through major gateways between the five or so regions. This masks price transparency by indirectly assigning local capacity. Local markets often suffer (price and pollution) for the greater cause of a region. And the transmission between boundaries are an expensive bottleneck (close to a billion dollars were spend in 2006 on upgrades alone). Now ERCOT wants to move to a nodal system where they will have better dispatch capabilities based on local price signals. Even the Dinosaurs get good ideas.
So, if broadband access is to be functionally separated from services and placed in a monopolistic (franchised, government, co-op or otherwise) utility model as some advocate (including myself), there will have to be mechanisms for innovation. The solution will have to have incentives, as we can not allow the innovation to only thrive at the services layer. Thankfully this is in the forefront of some of our industry thinkers (like Brough Turner in a recent interview).
Ignore it and you wake up one day to black-outs. Sadly for ERCOT, it will be an uphill battle in an economically hard time, pleading to a constituency already burned out from some of the highest power rates in the U.S.
