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Weekly Column

A Prius in Every Garage: Bob's $700 billion Christmas wish list.

Status: [CLOSED] comments (169)
By Robert X. Cringely
bob@cringely.com

Christmas is almost upon us, people are in a holiday spirit of sorts, and the national mood, while melancholy with the war and uneasy with this weird economy, could still be a lot worse, that's for sure. My personal mood is more of contemplation as I think about how things might have been and how they might be again if done right this time. I'm thinking, of all things, about the old National Information Infrastructure -- Al Gore's Information Superhighway.

The National Information Infrastructure, or NII, is one of those dark spots on our technical history, a good idea that may have been too early but was definitely screwed up, early or not. In case you don't remember, the U.S. Government came up with the idea of wiring first schools and then homes, primarily with fiber, with the goal of bringing high-bandwidth communication everywhere. The mechanism by which this was to have been accomplished was by encouraging through tax credits for telephone companies to upgrade their networks and by imposing a tax on telephone users to support the wiring of schools.

It didn't work. Our homes didn't get networked in any large numbers, not enough to keep up with much of Europe and Asia. Even many schools are still off the net, despite the fact that tens of billions of dollars in taxes were paid by consumers and hundreds of billions in taxes were forgiven to telephone companies. This failure can be blamed on the dot-com meltdown and subsequent recession, and on the failure of equipment suppliers like Lucent and backbone owners like Global Crossing, but a closer look shows that the truth is we were probably robbed. Money was gathered and spent in wiring the schools, yet many schools were missed. The telcos grabbed every tax credit they could "qualify" for (more than $200 billion in all), yet where is my real-time high-resolution video conferencing? We were cheated.

And most of the cheating dates from the summer of 2001 and after, a time of turmoil, sure, but also a time when government oversight of these particular programs came pretty much to a halt. BEFORE 9/11, the Federal Communications Commission appears to have stopped caring very much about these programs, though of course they were never halted, so the money kept moving whether it was being well spent or not. And after 9/11, well things went kablooey as government turned to stamping out terrorist cells and listening to your phone calls.

Since then, in addition to the $200+ billion thrown away paying for but not achieving the NII goals, we've spent another $500 billion (not including interest) on various foreign adventures intended to make us all feel safer. I just wonder what we could have got for that money, for the full $700+ billion, if we'd spent it more thoughtfully, perhaps more as a business might do?

This exercise is not intended to impugn anyone's patriotism, and hindsight is always easier than foresight, but I think it is still worth doing. I also think I was making the same point back in 2001 and nobody was listening then, either.

My goals in spending $700 billion would be economic development and energy self-sufficiency for the U.S., not specifically to develop the Internet. That just naturally follows. Notice that Iraqi and Middle Eastern politics aren't even an issue here.

It may sound simplistic, but what would have happened had we simply bought a Toyota Prius for the 10 million American households that currently burn the most gasoline? This wouldn't be a matter of forcing people to take a free car, but how many would turn one down?

Toyota probably couldn't make that many cars in time, so the government would have had to license the Prius design and have it built by ALL domestic car manufacturers. Economies of scale would kick in, so let's put the average cost of those Prius clones at $20,000 each, with 10 million Prius clones costing $200 billion.

For that $200 billion, we'd lower our unleaded gasoline consumption by 30 percent (remember these cars go strictly to people who drive the most), cutting our total energy demand by 9 percent. With 10 million extra cars to make, the U.S. auto industry would have boomed and with it, at least to a certain extent, the overall economy. Even more important, greenhouse gas emissions and overall air pollution would decline, as would the need to build new oil refineries. Nine percent doesn't seem like much, but it would be enough to bring the U.S. almost into compliance with the Kyoto Protocol to combat global warming.

There are lots of side effects of this car-building boom, too. Pumping 10 million 2,500 poundPrius clones onto the highways would mean dragging off the highways 10 million 4,000+ pound gas guzzlers. Overall highway safety would improve, but the influx of scrap metal into the world economy would also go a long way toward mitigating some of the resource scarcities currently caused by that big sucking sound coming from China. Yes, we'd still need scrap to make those Prius clones, but a lot less of it, with the rest leaving for China.

To further attack the energy problem, we might spend another $300 billion on alternative fuels. Brazil's success with ethanol alone suggests that we might cut another 10 percent out of our oil import bill in this manner, so now we're down almost 20 percent overall. I am not saying ethanol is the answer, by the way, but I AM saying that the broad variety of alternative fuel programs being privately funded lately (private money being generally smarter than public money) could probably achieve that result with a $300 billion investment.

Finally, let's look at the Internet, but with a highly specific goal -- to help people work from home, thus further cutting oil consumption tied to commuting. Forget about schools, interactive TV, any of that stuff. All we are trying to do is build big pipes to houses and open up virtual private network connections. There are 110 million households in America, of which perhaps 20 million are suitable for working at home yet aren't presently being used for that purpose. That's $10,000 per connection, which would be more than enough to bring fast fiber to every one of those 20 million homes.

The residual impact of pumping $200 billion not into tax credits for telephone companies but directly into installing fiber to homes and backbones to support that fiber would be huge. Network equipment prices would plummet, bandwidth costs would decrease, and neighbors and schools alike would benefit whether they were part of the program or not. And keeping 20 million people at home would probably save another 5 percent on our energy bill as well as allowing millions more to watch Dr. Phil or All My Children.

For our $700 billion, then, we would have pumped up the economy and driven down energy consumption by about 25 percent. Our network improvements would further encourage economic development, and with fewer people driving smaller cars our infrastructure would be in somewhat better shape.

But would it be enough to matter? Yes it would. Markets are strange things and they thrive on scarcity. The result of a 20-25 percent drop in U.S. oil consumption would be a substantially larger drop in world oil prices analogous to the steep declines of the late 1980s where the triggering supply surpluses were actually much smaller. And in this case, since we'd be supplanting oil with alternative fuels, any withering of the oil industry would be okay, even good.

My major point here is that there are many ways to look at a problem and sending troops to enforce some imagined status quo isn't always the only solution, or even the best one. There must be room for new ideas.

Have a great holiday. At the Cringely household, where there are three boys under the age of five, this Christmas we're going all-Power Rangers, all the time.

Comments from the Tribe

Status: [CLOSED] read all comments (169)

I think MPG is a reasonably sensible way of measuring fuel consumption, however I do agree that the Prius is not especially good at reducing fuel consumption (but it is exceptionally good in the marketing dewpartment). A Diesel hybrid would perform better as it would be easier to optimize a Diesel engine for this application. I would not abandon other concepts either, but the Diesel hybrid is at this moment the most realistic way to go.

Maarten Bakker | Jan 03, 2007 | 9:42AM

Wishful thinking. We need to first take our government back, take power away from the rich and the corporations, and rewrite our priorities into the constitution to include the poor and the environment.

Jamie Aaron | Jan 03, 2007 | 10:17AM

Hi:

You are forgetting that it would take huge amount of new metals, energy, and other resources to make the Prius which is a loss to the earth in terms of natural resources and creates more pollution.

Second, dealing with 10 million 4000+ pound cars is not as simple as sending scrap metal to China, it creates a huge environmental problem.

By only looking at one aspect, operational use of the car, you are forgetting the bigger picture of creation and disposal of cars.

In terms of ethanol, it is not that straight forward to pump in $300 billion dollars in one go.

Suhit

Suhit Anantula | Jan 05, 2007 | 7:55PM