正文
THREE-QUARTERS of Americans admit that they search the web, send e-mails and check their social-media accounts in the bathroom. That is not the only connection between tech and plumbing. The water and sewage industry offers clues to the vexed question of how to regulate the Silicon Valley “platform” firms, such as Alphabet, Amazon and Facebook. The implications are mildly terrifying for the companies, so any tech tycoons reading this column might want to secure a spare pair of trousers.
In America and in Europe a consensus is emerging that big tech firms must be tamed. Their dominance of services such as search and social media gives them huge economic and political clout. The $3trn total market value of America’s five biggest tech firms (Apple and Microsoft are the other two) suggests that investors believe they are among the most powerful firms in history, up there with the East India Company and Standard Oil.
Trustbusters in need of instant gratification want to break up the companies, but this might make their services less useful (imagine having ten social-media accounts), and network effects might mean that one of the tiddlers would grow dominant again. Others want tech firms to license their patents for nothing, as AT&T was required to do in 1956. This might create startups tomorrow, but will not stop firms exploiting monopolies today.
An alternative is to regulate these companies like utilities—monopolies with high market shares that provide an essential service from which it is expensive for consumers to switch. Here, the water industry is relevant, particularly the concept of a regulated asset base (RAB). It emerged in the 1990s when Britain was privatising its water firms, borrowing elements from American regulation. It is an acronym that few in Silicon Valley are aware of. But from these obscure origins RAB frameworks are now common in Europe and Latin America, used to regulate at least $400bn-worth of power, airport, water and telecoms assets.
