Patient capital
Many thanks to Benoit Felten for writing and Dirk van der Woude for pointing to this post.
A key question for internet policy and telecom law is: is the private value of an interconnected, globally-addressable, neutral network enough to satisfy the private actors involved?
Let’s say that we know the public values of such a network are great for any particular locale - it will assist with economic growth, give people new opportunities to find jobs, build community (at the same time that it makes global communities more easily reachable), and provide new opportunities for new things of many kinds. But if the private actors that run these networks aren’t satisfied that they’re getting enough out of them - each quarter - they’ll try to fragment these networks to their own advantage. Public value, schmub-lic value; that value won’t matter to them. As Kevin Werbach points out in an upcoming paper, the pressures to balkanize are great on several layers of the protocol stack — transmission, names/numbers, and content.
This same private unhappiness is multiplied by the investor effect. If private investors (”the Street”) can’t wait for longterm payoffs and aren’t in it for the public “payoff” (and what rational investor would be?) then they’ll push network providers of all kinds to push for quick revenues at the deliberate expense of longterm social goals.
The post by Benoit Felten that I’ve linked to above reports on a presentation making this point.
Here’s the argument: There are great deficiencies in highspeed internet access infrastructure investment.
Infrastructure investment requires “Patient Capital.” (This is a great term that needs to be in broader use.)
But private equity firms are often focused on short-term investment that will knowingly compromise the long-term future stability of a particular business. And the report is that the efforts of private equity firms “have driven two major European incumbents to the ground, namely Eircom in Ireland and TDC in Denmark.”
Patient capital, patient policy. More patience all around.