Spring 2000. I was a young executive at an application service provider called Interliant, and I was flying to Houston to unwind a bandwidth contract that had gone underwater in less than a year. The counterparty was Enron. I did not know that yet in any way that mattered, and I certainly did not know that when I walked into their conference room, I would spend the next hour watching people who had no idea what a DS3 line was try to explain to me why the contract we had signed was still worth what they said it was worth.
I had come with numbers. Bandwidth prices had collapsed by more than half in the twelve months since Interliant had committed. The dot-com fiber glut was already the story that people who paid attention were quietly telling one another, and the people who did not pay attention were still writing checks against it. I was there to move a check back the other direction.
The Enron team across the table was polite and confident and, I slowly realized, unmoored from the actual product. They had traders' vocabulary. They had "positions" and "exposure" and "curve." They did not have a sense that a DS3 was a physical thing that ran through a physical building somewhere in Texas that either could or could not carry data at forty-five megabits per second. To them, bandwidth was a number that had once gone up and would, in some model somewhere, go up again.
I did not think of that meeting for years afterward as anything more than a bad afternoon on a business trip. I thought of it later, after Enron collapsed, as one of the small personal contact points anybody who worked in that industry has with the larger story of what happened. It took me longer, honestly much longer than it should have, to see that I had been sitting inside the fourth great infrastructure buildout in modern history at the exact moment it was learning the lesson the three before it had already learned.
The railroads had learned it. The telephone system had learned it. The electric grid had learned it. And now the internet, the physical pipes and racks and the dark fiber running along the old rail rights-of-way, was learning it too. The lesson was simple to state and hard to accept. The people who built the essential infrastructure did not, as a rule, end up holding the value that infrastructure created. They enabled the value. They did not capture it.
Twenty-five years later, the fifth great infrastructure buildout is spending ten times the money. This book exists to ask whether anyone in the room has done the reading.
Excerpted from Chapter 1 continues in the book.