NEW YORK ( TheStreet) -- Back in the early 1990s I handled a telecom beat for Newsbytes, a tech news service.
My subject was scarcity. The U.S. industry had been regulated for almost a century to spread capital thin, like butter over too much bread. In exchange for "universal service," telephony was a government-controlled monopoly.
The model was a great deal for tinpot dictators the world over. The "West" regulated telephony, they taxed it and police could tap into any line. So dictators did the same. It could cost several dollars per minute to call people in some parts of Africa. Few did.
When the old AT&T (T) or MCI, now part of Verizon (VZ), brought fiber lines across the ocean they negotiated deals with the local monopolies, controlled by the local dictators, assuring that the scarce resource would go first to the dictator's friends, and that tons of money would flow his friends' way, too. Control of the resource meant control of the economy and control of the people.The Internet is based on abundance. Google (GOOG) is just one example. Without any government subsidy, without regulation, it now has more Internet capacity -- compute capacity, transmission capacity, storage capacity -- than either of its well-regulated rivals. We have run the experiment. We know what works. The International Telecommunication Union, or
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