Who Will Own The Infrastructure In The Smart City?

Source: Forbes on January 11, 2018 | Clyde Wayne Crews Jr. 

There is great enthusiasm for the smart city concept. Integration of autonomous vehicles, drones and networked communications are expected to manage congestion, lead to fewer accidents, reduce pollution and enhance quality of life.

The smart city was a major theme at the 2018 Consumer Electronics Show (#CES2018), hosted by the Consumer Technology Association.

Will smart cities be vibrant bastions of competitive private free enterprise and innovative new networks of communication that simultaneously respect individuals' privacy?


Or are planners on a path to setting up mega public utilities and administered cartelization, and compulsory information collection?

Will there be vibrant creative destruction?  Or instead lock-in of standards and technologies and exclusive franchises that benefit certain vendors and protect them from competition?

Policymakers used to talk about privatization of infrastructure (as well as lands and government labs).

Much of that withered, although efforts to liberalize telecommunications infrastructure and to free spectrum enjoy some love.

Some also worked to liberalize electricity grids, that is, to deregulate the infrastructure itself, not just the “flows” over it (the now semi-illusory competition of  “choosing your electricity provider"). In part because of that failure, cybersecurity and infrastructure vulnerabilities persist that we might not otherwise have.

In thinking about smart cities and the infrastructures that will compose them, it matters that we were incapable of liberalizing these predecessor infrastructures.

We should have long since removed inefficient regulatory barriers between infrastructure sectors that even today keep them siloed (electricity, telecom, water, sewer, roadways).

If smart cities start with buildout synergies untapped, they cannot become nearly as efficient and smart as they should. These predecessor infrastructures are part of the foundation of what comes next. If they've already got two left feet, so will the smart city.

It was not inevitable that past infrastructures became regulated monopolies against whom it was illegal to compete. The modern risk is that the same kind of rent-seeking and regulatory capture that set innovation back then, could do so now.

Some had been recently making the case against municipal broadband, in the sense that governments should not be competing with the private sector. Smart cities would go much farther than that trivial-by-comparison unwise model without the same scrutiny.

The actual privatization noted above matters even more. Governments own the roads on which driverless cars will travel. Drones will traverse FAA-allocated airspace.

The very locational technologies that now make a smart city something thinkable in the first place also make it possible to reconsider those legacy "pre-historic" modes of governmental operation, and to implement instead private control, ownership or divestible licensing. You may not be ready to sell off all the roads, but think about what is not yet built.

Another question is who’s going to pay for all the new? A CES 2018 panel on financing the smart city ecosystem discussed the strain for city budgets. City budgets? If taxpayers are the funding source when all is said and done, we’re talking old-school public utility and public infrastructure for the most cutting edge technological frontiers.

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