18F is doing e-government and gaining traction

18F: Open source and transparent processes -- who says government has to be old fashioned, slow and inefficient?

In an earlier post, I described USDS and 18F, new government agencies that are intended to improve US e-government in the wake of the HealthCare.Gov debacle. USDS is a management consulting firm for federal agencies that favors lean startup methods, open source and agile development by small teams. 18F complements USDS -- they build tools and implement government systems.

You can check 18F's open source projects at the "alpha" version of their project dashboard. As shown here, they currently have twelve projects in various stages of development.

Scrolling down, one sees the entries for each of the 12 current projects. For example, they are building a portal for submitting and searching for Freedom of Information Act requests for the Justice Department. (Note that the department is a partner not a client).

The project descriptions have links to pages where you can see and contribute to the code, discuss the project with the developers and the public, and read a news release describing the project.

18F is not unique. The UK Government Digital Service has the goal of "transforming government services to make them more efficient and effective for users." They were formed several years ago in response to dissatisfaction with the British Health System Web site. You can learn more in this NPR story.

18F and the UK Government Digital Service have something very important in common -- they are staffed by skilled experts who could be making more money in the private sector but have elected (perhaps temporary) government service. I saw the same thing in a study of the Internet in Singapore where the "best and the brightest," went to government service.

How great would it be if all of government were staffed by the same sort of people?

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Update 4/26/2015

The Defence Department and Homeland Security hope to attract tech talent from Silicon Valley and elsewhere to help with security and other applications. This initiative "stems directly from the President," who has turned to modern technology and methods in political campaigns, debugging the Healthcare.gov site when it was in trouble and more. The pitch is to "take your skills and work for team America."

Is Alibaba comparable to a US company?

Alibaba is this weeks hot news -- they have had a lengthy PR campaign (preceded by a documentary film) followed by a record-setting stock offering.

I went with the hot-news flow, posting a comparison of Alibaba's market capitalization to those of other prominent companies as a "current event" for my class, but then I began to wonder whether that was an apples-to-apples comparison. I think I know what companies like Apple or Intel or Amazon are and do, but, I am not sure about Alibaba.

This was driven home by a New York Times article on Alibaba and its relationships to other companies and its history with respect to Yahoo. A lot of the article is summed up in the accompanying graphic, which depicts Alibaba's corporate investments, corporate investors, including Yahoo and Softbank, and Alibaba founder Jack Ma's personal investments:

This graphic reminded me of a case study of the Internet in Singapore that I worked on several years ago. With the help of my nephew, who worked for Goldman Sachs in Singapore at the time, I made the following graph of the ownership relationships between Singapore info-communication companies and the Singapore government in the year 2000.

Both graphics depict a Web of business and ownership relationships, based on corporate and personal ties. (The tie between Yahoo and Alibaba seems to have been based in large part on the relationship between Jack Ma and Yahoo co-founder Jerry Yang). To a degree, US corporations are also parts of such webs, but is their interconnection as deep as that of Alibaba or the Singaporean companies?*

These graphics call to mind the stereotypical differences between US and Chinese (Asian?) cultures. For example, this pre-departure guide for Chinese students contrasts an individualistic US with a collectivist China.

I am surely not an organization theorist, political scientist or anything close, but I wonder about basic differences between a US company and a Chinese company like Alibaba. Is owning a share of, say, Apple, conceptually the same as owning a share of Alibaba?

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* This is not to imply that all Asian corporate cultures are the same -- for example, the venture-capitalist role of the Singapore government is apparent in the Singapore figure above. That being said, it should be noted that, when I was there, Chinese people dominated the Singaporean companies.

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Update 10/3/2014

There is a long discussion of this post on the Slashdot Web site. The discussion rambles quite a bit -- for example some comments talk about the structure of this particular offering rather than the nature of Chinese vs. US corporations. One exchange that I liked was:

Comment: At that high level, the line between corporations and the government becomes blurry, no matter which country you live in. Just look at Standard Oil, Boeing, Halliburton... The list goes on.

Reply: For sure, but are there differences in degree? For example, in Chinese dominated Singapore, the government is an explicit shareholder. I wonder if anyone has done a study of explicit ownership of stock by US companies --- e. g., does Haliburton own stock in Standard Oil?

Stockholm: 19 years of municipal broadband success

The Stokab report should be required reading for all local government officials.

Stockholm is one of the top Internet cities in the world -- how do they do it? Wholesale communication infrastructure in Stockholm is provided by AB Stokab, which is owned by the Stockholm City Council. Stokab leases dark fiber and space in nodes/hubs where customers can install communication equipment and interconnect networks since 1994. Stokab's goal has been to build a competition-neutral infrastructure capable of meeting future communication needs, spurring economic activity, insuring diversity and freedom of choice and minimizing disruption to the city’s streets.

How has it worked out?

Quite well, as you see in the following figure, taken from Stokab's report on the socio-economic cost and benefit of the project:

Accumulated investments and socio-economic
return in million Swedish Kronor.

The returns shown here reflect increased property value, returns of the municipal housing companies (currently breakeven, due to large investments), value for tenants, increased employment, Stokab’s profit, saving for the municipality’s and county’s data and IT costs, and increased economic activity in the supplier industry. To drill down into the details, see the Stokab report summary or the full Stokab report.

The Swedish Telecommunication regulator published a report calling for openness and competition at five Internet service infrastructure levels -- from physical access to land, ducts and spectrum through retail Internet service -- based on the Stockholm experience.

A lesson for the US?

The US needs infrastructure investment -- who will make it? The telephone and cable companies were given a chance, and they've dropped the ball. The Stockholm experience shows the role local government can play. National government's have also been important. The US Federal Government underwrote the research that gave us the Internet and governments like those of Singapore or China have worked as planners and venture capitalists. Home and building owners can also contribute to "last 100 yard" investment.

Singapore's government acts as a planner and venture capitalist.

Given the current US Congress, it is hard to imagine the Federal Government investing in Internet infrastructure, but FCC Chairman Tom Wheeler has praised municipal broadband efforts, wants to fight state laws prohibiting or restricting them and he is currently challenging Tennessee's anti-municipal net law.

In spite of the fact that Wheeler came from the ISP industry, you have to like a guy who says:

If the people, acting through their elected local governments, want to pursue competitive community broadband, they shouldn't be stopped by state laws promoted by cable and telephone companies that don't want that competition.

The situation in the US will not change until the Internet becomes a political issue for the general public and that may be happening -- check out comedian John Oliver's piece on the Internet. Wheeler watched Oliver's piece and responded -- check that out too -- it's funny!

ISP industry lobbyists claim that government involvement interferes with The Market, leading to waste and inefficiency, but in Stockholm, the municipal government has created a competitive market. This story is biased because we can't expect every local government to be as skillful as Stockholm's, but their example is worth considering.

My son pays $30/month for symmetric, 100 Mbps Internet service ... in South Korea

My son lives in a relatively small city about 50 miles from Seoul.

He has a choice of three major Internet providers -- their monthly list prices for symmetric 100 Mbps Internet connectivity are as follows:

KT Corp: 31,680 ₩
SK Broadband: 33,000 ₩
LG Corp: 31,350 ₩

1,000 won is just under one dollar – about 96 cents, so, they are all around $30 per month.

Here is a copy of his latest bill from SK Broadband:

The top line is his charge for the month. (The second line shows the balance due from the previous month).

The charge is 35,000 ₩ (I guess there are some taxes), but he has a 13,000 ₩ discount because he signed a two year contract. With that contract he is paying about $22 per month for 100 Mbps connectivity.

How does that compare to your Internet service bill and speed?

How about customer service? Here is a quote from a comparative review of South Korean ISPs:

As mentioned earlier of fierce competition between a much-similar service providers, they will dispatch a repairman within a few hours of your call, even on WeekEnd!

How is it that Korea has achieved intense ISP competition? There is no simple answer, but the government has pursued a multifaceted policy encouraging investment and demand creation and providing common infrastructure, which is used by compteting ISPs (as in Singapore, Sweden or Latvia)

By contrast, we have little ISP competition in the U. S., leaving customers in a weak position -- dealing with non-competitve providers of a necessary service.

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Update 4/11/2014

My son saw this post and offered a couple of corrections. He sent me prices for the three major ISPs he can choose from, but says there are a number of smaller ones -- he said I understated the level of competition. He also said that the difference between his bill and the list price I quoted was not due to taxes, but the fact that the list price comparison he sent me was from a blog post and may not have been current. His list price is 35,000 ₩, not 33,000 ₩, but the general point remains true.

Two studies of concentration of power -- government and industry

A study of the relationships between 43,000 transnational corporations has identified a relatively small group, including many banks, with disproportionate power over the global economy.

(Study details are available in this paper).

The image shown here (click to enlarge) represents the 1,318 transnational corporations that form the core of the economy. Superconnected companies are red and very connected companies yellow. The size of the dot represents revenue. Each of the 1,318 had ties to two or more other companies, and on average they were connected to 20. The anlysis revealed that 147 even more tightly knit companies controlled 40 percent of the 43,000 corporations analyzed.

Characterizing the concentration of power in this way is time timely in light of the recent "occupy Wall Street" demonstrations, and provides background for James Allworth's suggestion that we may be facing a choice between capitalism and democracy.

This sort of concentration is worrisome from the standpoint of stability as well as equity. What is the effect of the failure of one of a limited number of large entities -- like banks that are "too big to be allowed to fail?" Note that the database used in the study was compiled in 2007, so it does not refelct changes that have occured during the current economic crisis.

This study reminds me of another case of concentration of control. Around ten years ago, I worked on a study of the state of the Internet in Singapore for the International Telecommunication Union (ITU). I noted at the time that the government played a central role there. They picked critical areas of the economy -- oil, shipping, banking, information technology, biotechnology -- and acted as a heavy-handed venture capitalist. With the help of my nephew, who was working for Goldman Sachs in Singapore, I put together this diagram showing government ownership in the telephone and ISP industries.

The government was not a passive investor. They hired the best and the brightest coming out of the universities. They created some of the earliest strategic IT forecasts and plans, which were put into effect through significant investment. (The best and the brightest avoid government in the US, but that has not always been the case).

This approach has served Singapore well. Today, they are ranked 19th in the world on the ITU ICT Development Index. The top twenty nations all have powerful governments -- most would be considered socialist failures in tea party circles.

We've seen two studies of the concentration of power -- one in the hands of business, the other government. No study or theory will ever be able to fully comprehend anything as complex as an economy or an industry, but these cases indicate that government has a place in ensuring stability and encouraging the development of infrastructure.

Singapore is installing fiber to every building

This figure is taken from a an ITU study on the Internet in Singapore that I worked on several years ago. It depicts the government role as an equity investor in the ISP industry. (The government has played a similar role in the oil, finance, shipping and biotechnology industries).


Continuing that policy, the government of Singapore is investing in fiber to every home, school, government building, business and hospital. Their Next Generation Plan is for 95 percent of buildings to have access to a 1 Gbps connection by 2012.

They will also follow the model of competitors using open, shared infrastructure, which seems to be working well in Stockholm and other cities.

There are caveats. Singapore is a small, city nation, and a very high percent of the population lives in apartment buildings. That makes this plan relatively cheap. Retail connectivity prices are also a question mark -- will there be sufficient competition over the shared infrastructure to keep them low?

If the network succeeds, and 1 Gbps connectivity becomes ubiquitous, what applications might they develop? What would you use a 1 Gbps link for?