The future ain’t what it used to be

Perspectives on investing in the option value of fibre

James Enck
mCAPITAL
Your future here
If the past has
any lesson for
us, it’s that
predicting the
future is very,
very hard
 Especially when
predicting the sorts of
things we won’t need
Not that this fact ever stopped
anyone…
What, sir, would you make a ship sail
against the wind and currents by
lighting a bonfire under her deck? I
pray you, excuse me, I have not the
time to listen to such nonsense.

Napoleon Bonaparte, 1800

 Rail travel at high speeds is not
possible because passengers, unable
to breathe, would die of asphyxia.

Dionysius Lardner, Professor of Natural Philosophy

and Astronomy at University College, London, and
author of “The Steam Engine Explained and
Illustrated”, 1830
 Well-informed people know it is
impossible to transmit the voice over
wires and that were it possible to do
so, the thing would be of no practical
value.

Boston Post, 1865

This "telephone" has too many
shortcomings to be seriously
considered as a means of
communication. The device is
inherently of no value to us.

Western Union Co. internal memo, 1876

 The Americans have need of the
telephone, but we do not. We have
plenty of messenger boys.

Sir William Preece, Chief Engineer, British Post

Office, 1878
Everything that can be invented has
been invented.

Charles H. Duell, Commissioner, U.S. Office of

Patents, 1899
Who the hell wants to hear actors talk?

H.M. Warner, Warner Brothers, 1927

There is no reason for any individual
to have a computer in his home.

Ken Olsen, founder and CEO, Digital Equipment

Corporation, at the World Future Society, 1977
Of course a Ferrari is faster than
a Ford, but most people are
happy with a Ford.

Ian Livingstone, CEO, BT Group, Digital

Britain Forum, April, 2009
 Expedient choices, dire
consequences
“I told Mike he'd have to decide between them. It was up to
him - The Beatles or Brian Poole and the Tremeloes. He
said, 'They're both good, but one's a local group, the other
comes from Liverpool.' We decided it was better to take the
local group. We could work with them more easily and stay
closer in touch as they came from Dagenham.”
Dick Rowe, head of A&R, Decca Records

“We don’t like their sound. We don’t think they will do

anything in their market. Guitar groups are on the way out.”
Beatles’ rejection letter from Decca Records
Innovations have an annoying habit of
mutating in unpredictable ways
 Warfarin
nitroglycerine
SMS
email
Some innovation happens way too soon, only to
be abandoned and revived later
 Fiber is not just about video!
• e-learning
• e-medicine
• e-government
• smart grid
• distributed computing
• telecommuting
• sensor networks
• green dividend
Any lessons here?
“When our leaders were contemplating the rollout of electricity in
the 19th century, few would have foreseen the profound impact it
has had on our economy over the past 150 years. When, in 1894,
most of Melbourne's streets were brightened by electricity from
Australia's first power station, few could have known the full
extent of innovation that would follow. Since then we have seen
the advent of refrigeration, automated production lines and
electronic media. New industries have flourished and services
have improved standards of living across the country. We live in a
society where every function and process has been shaped in
some way by electricity. It has driven new market efficiencies,
productivity and jobs. This technology has fundamentally
changed Australia. For this we can thank the vision of previous
Governments - Governments that ensured that Australia kept
pace with the world and we reaped the rewards. Our past leaders
ensured we have had access to enabling technology, offering
opportunity beyond their original intentions.”
Stephen Conroy
Australian Minister for Broadband,
Communications and the Digital Economy, April 2009
 Decisions, decisions…

• How to incentivise stakeholders to

invest?
• Can this even be achieved in the
current market context?
• Where will the liquidity come from?
• How can we quantify the impacts of
innovations which haven’t occurred
yet?
• We can’t know the answers to some
of these questions – the option value
of symmetrical fiber is hard to
calculate prospectively, but much
easier in retrospect.
• Conversely, it’s easy to demonstrate
a lack of utility for something which is
not available.
• Many world-changing innovations
would not have occurred if sceptics’
views had prevailed.
• Connectivity policy is not enough – it
must be part of joined-up thinking
Awaiting paint, brushes,
and, most of all, vision
Thanks!