Several recent articles and news reports over the past week or two made me again ponder on the future of ‘bit pipes’. Long the fear of many operators that they would be commoditised into a ‘mere bit pipe’; I’ve long wondered why it would be so bad, after all. Lots of other industries do well out of commodities, provided they understand the rules: – high economies of scale, low operating costs.

But that’s applying market logic to the communications industry where economic logic and regulation long ago parted company. CEO designate of BT, Ian Livingstone, this week  called for UK regulators to rethink the universal service obligations on BT before he would consider a ubiquitous fibre access network rollout; the Net Neutrality debate continues to run and run in the US; “structural separation” becomes the new toy of regulators everywhere.

A few years ago, commenting on the ludicrous £24 billion tax take of 3G spectrum actions in the UK, digital guru Nicholas Negroponte commented “All we have achieved is condemning our children to an information poor society”.  Given the lack of speed of broadband mobile rollout, the taxman’s gain is society’s loss – and like a boomerang it turns all the way back to impacting business efficiency and in turn the taxman.

So why are legislators trying their best to disincentivise ubiquitous fibre roll out. If you or I had a few billion in the bank and someone came across an investment plan that tried to persuade us to invest in a major capital program with little or no ability to get any return from it, we would tell them where to get off. But that’s what legislation like universal service mandates; controls over what services can be put over networks (like entertainment); or the inability to charge more for providing a better grade of service do. They set up a situation where investments can’t make an economic rate of return and so guess what – investments aren’t made.

Legislators are good at stopping things. They are much less good at making things happen. So the controls brought in to cramp the style of ex monopoly carriers might have been valuable at one time but right now, the vast majority of the world’s fixed access networks are decades old copper with ADSL go faster kit on it to give broadband in the low megabits range. I get about 600K/bits/ sec on a good day when the farm next door’s electric cattle fence is not switched on.  Some lucky people in towns get up to 8 M/bits.  But with a theoretical upper limit of about only about 25Mbits on a very good local loop, the world will run out of capacity much faster than it takes to re-engineer it with ultra high bandwidth fibre.

Not so long ago the cry was “what would we fill all of those hundreds of megabits with even if we had it”. Now we know. Bandwidth hunger is following Moore’s law norms. Just last week UK ISP’s were bemoaning the fact that the BBC’s iPlayer ‘play-it-again’ web TV service had been so successful since its launch a few months ago that it now consumes about 5% of all UK internet bandwidth. And rising fast.

So my beef of the week is for all of those helping hands (or helping snouts in troughs!) to butt out of getting in the way of getting the kind of infrastructure we need to support the kind of information society people wrote dizzying essays about a few years ago that is finally becoming reality.

Buyers want to buy the fruits of that capability. Investors want to invest. It’s just all of the stuff in the middle of sectional interests, out of date regulation and short term thinking that’s stopping it.

Remember Negroponte’s words.