Beaver pelts and broadband
In 1670, King Charles II of England granted a group of 17 men—now called the Hudson Bay Co.—a royal charter, which gave them control over 40 percent of modern Canada. Under the charter’s terms, any British monarch who visited the part of the North American continent ceded to the company was to receive two elk heads and two beaver skins as payment of rent.
Probably because 17th, 18th and 19th century transportation networks made it nearly impossible for monarchs to visit their far-flung possessions, Charles and his direct heirs never collected the tribute. In the 20th century, in dutiful compliance with the charter, however, the Hudson Bay Co. department store chain has given elk heads and beaver skins to British monarchs who have visited Canada. As snopes.com reports, the most recent “tribute” appeared in the form of live animals which Queen Elizabeth II then donated to a zoo.
Needless to say, however, the modern Canadian and British governments aren’t in the habit of requiring payment in animal pelts from department store chains. The reason, of course, is that the economy, tradition and custom have all changed radically. And these changing standards provide a pretty good way of looking at some debates about a concern far more current than animal pelts: broadband Internet.
In particular, Google today announced a plan to expand its Google Fiber network into nine metro areas. Joining existing networks in Provo, Utah, Kansas City, Mo. and Austin, Texas will be new entrants in the Atlanta, Charlotte and Raleigh-Durham, N.C., Nashville, Tenn., Phoenix, Portland, Ore., Salt Lake City, San Antonio and San Jose, Calif. markets.
According to the company, they are working with leaders in each of the affected cities, examining issues like topography and existing infrastructure, as well as assessing what unique local issues (including regulation) could present challenges. While there aren’t any specifics yet about agreements in the new markets, there’s sure to be some mislaid outcry about Google getting “sweetheart” deals because of the very fact that is working with governments. Here’s one such critical take on its existing Kansas City project. But most of the things that Google says it wants, like a streamlined regulatory approval process, aren’t unfair even if incumbent competitors didn’t get them when they built their networks.
While the difference between the regulatory environment of the 1970s and 1980s—when most cable networks were deployed—and today isn’t as vast as the difference between 17th century England and today, it’s still quite distinct. Nearly all the cable companies that now dominate the broadband business paid for and received monopoly franchises and that, at the time, struck many as the best way to provide cable service. Google is largely competing with many of these one-time monopolies. Its technology, business model and the economic environment that it operates in are also a good deal different. A different regulatory model appears perfectly appropriate.
What matters isn’t how competitors were treated in the past but, rather, how they will be treated in the future. If another company, willing and able to do the same things as Google, gets different treatment, that’s unfair and unwise. But that companies had to jump through enormous bureaucratic hoops in the past isn’t, by itself, a good reason to require companies to be loaded down with the same red tape in the future.
Trying to correct regulatory asymmetries retrospectively is impossible and would be as nonsensical as requiring Target (which just entered the Canadian market) to render the same payment in beaver skins and elk heads as the Bay.
