December 2009

Millions of households across America are taking a first step into the world of the "smart grid," as their power companies install meters that can tell them how much electricity they are using hour by hour — and sometimes, appliance by appliance. But not everyone is happy about it. Customers in California are in open revolt, and officials in Connecticut and Texas are questioning whether the rush to install meters benefits the public. Some consumers argue that the meters are logging far more kilowatt hours than they believe they are using. And many find it unfair that they will begin to pay immediately for the new meters through higher rates, when the promised savings could be years away. Power companies say the meters will allow utilities to vary the price charged to their customers by the hour to correspond to what those utilities are paying for energy in the wholesale market. This can help consumers save money, they say.

With momentum building in Washington for all 50 US states to outlaw text messaging behind the wheel, there is evidence that the key demographic targeted by such legislation, teen drivers, will not pay much attention. At least one major study has found that, with mobile devices now central to their lives, young people often ignore laws against using cell phones or texting in the car. The number of text messages is up tenfold in the past three years and Americans sent an estimated 1 trillion in 2009. Some police agencies, while strongly in favor of such mandates, say its tough for officers to enforce them.

High-speed broadband networks are a platform supporting innovation throughout the economy today in much the same way electricity and transportation networks spurred innovation in the past. New innovations such as smart electrical grids, tele-medicine, intelligent transportation networks, interactive learning and cloud computing will require fast communication networks to operate efficiently. Telecommunication companies have been investing to upgrade their older copper and coax cables to new fibre lines which have vastly larger capacity but the economic crisis has threatened to halt this investment just when consumers and businesses are using more Internet bandwidth. Telecommunication investment largely mimics GDP (gross domestic product) growth - but in a more exaggerated way. Many governments have stepped in to fill the gap using stimulus funds to pay for new broadband networks. But there has been significant debate about whether these investments make economic sense, particularly as governments are entering into an area which has recently been entrusted to the private sector. This report helps put these interventions in perspective by showing that government investments could be justified based on just small direct benefits in just four key sectors of the economy - electricity, health, education and transportation. Just a small cost reduction across these four sectors resulting from the new networks could justify the government spending.

With an eye toward future growth, wireless-phone companies plan to encourage all of their customers to get "smart." In other words, they want customers to buy or upgrade to devices like an Apple iPhone, Palm Pre or the latest Motorola handsets such as the fast-selling Droid. Each of these mobile phones also includes powerful computer-like functions that make them "smarter" than traditional wireless handsets. Since these smart phones include all the latest features, such as Internet access and related software applications, subscribers usually upgrade to more expensive data plans. The result: substantially more revenue for US wireless operators. "The entire wireless industry stands to benefit from growth in data," Verizon Chief Financial Officer John Killian said Tuesday at an investors conference in New York. "We are at the beginning of an explosion in data."