Bob Frankston explains why the Economist don't know a market when they see one that doen't fit their phsical goods worldview.
We must address the realities of the new marketplace and assure the ability of connectivity. I expect we'll see a combination of private commodity suppliers of connectivity and municipal services since connectivity is a basic utility like water and electricity.
David Isenberg quotes Skip Mallete on how this is already happening in Washington State:
Two years ago the Washington State legislature put into a law a provision to allow Public Utility Districts and Rural Port Districts to build fiber infrastructure as wholesale providers. As a result the state association of PUDs formed a non-profit organization to build and maintain a statewide backbone to link all the PUDs together. This backbone, known as NOANET, also provides a link to the Internet at the primary interconnect in downtown Seattle. Most of the PUDs are electric utilities and can justify running fiber to the home as part of their operational needs. The biggest PUD in this effort is in Grant County and has done most of the pioneering effort. Several smaller county PUDs have followed Grant's lead and have begun allowing various service providers to use the FTTH to provide customers a choice of services including telephone, TV, and one whopping Internet service.
I hope 'the Capital of Silicon Valley' is paying attention.