Andy Oram has a long story at O'Reilly today detailing the problems with universal service and public policy.

It's a great historical overview.

But it's missing one key ingredient. And it's a surprising ingredient for Andy to miss.

That ingredient is Moore's Law.

Moore's Law applies to fiber, and it applies to data radios as well. Their capabilities grow faster-and-faster, faster-and-faster. It's the impact of Moore's Law on both these areas that have blown away the financial assumptions of the telcos, and the assumptions built into the universal service debate. (Image from Hitachi.)

Oram rightly criticizes conservative critics of the universal service ideal as "in no sense constructive" in their spirit. But he never really looks at just what has made these criticisms so powerful over the last several years.

That something is Moore's Law.

When something holds its value as you own it, you can safely buy it over time. If it fails to hold its value, you have to shorten the payment period. Thus 30-year home loans are a good deal for both you and your bank, but car loans are pushing it at 5 years.

The problem is that networking capacity, both the cost of moving a bit over a long distance and the cost of delivering that bit at "the last mile" of the network, is falling in value even faster than the car in your driveway. When the radios of today are more than twice as capable of handling local traffic as those of two years ago, and the technology of fiber lines show similar improvements, you have blown a hole into any long-term financing scheme.

No one, not a private company, not a municipality, not the federal government, can justify building telecom capacity today on the basis of a 30-year note. Not when that capacity is going to be worthless, in real terms, just three years from now.

Oram's Razor, as I call it, doesn't cut through this question. (Image from fnal.gov.)

The critics' policy prescriptions don't approach this problem, either. But, in refusing to deal with it, they do come closer to a solution than the advocates of government.

The real solution, as I've said, is to endorse full competition. Let the Bells die. Let the cable operators die. Demand that any company wishing to use some of their infrastructure be able to get it, at low, low wholesale prices. The recipients can invest this money as they see fit, but they must be made to take it.

In the end the only worthwhile assets the Bells and cable operators will have are publicly-controlled -- telephone poles and electromagnetic spectrum. Everything else is ripening fruit. (Image from CompUSA.) When it's ripe treat these assets as right-of-way. The government can promise to protect it and lease it as many times as the market can bear.

Let it ripen. Let it fall from the tree. But have a new crop coming in behind it, and new financial models based on Moore's Law, with new businesses that can provide service to everyone based on real economics, not just fictions.

Every policy prescription I see, across the political spectrum, is an excuse to subsidize either the government or incumbent duopolies. Conservatives' proposals actually violate their own ideological smell test, while liberal solutions all smack of corruption.

The only force that can hold up to Oram's Razor is Moore's Law. If it doesn't give you the closest policy shave you've ever had, send it back for a full refund. We think you'll be delighted.