I’m not sure what to make of Intel’s decision to enter the “market” for laptops to the developing world, though I am frustrated by Negroponte’s quick dismissal of this as Intel being evil rather than noting that this could be a fantastic opportunity to realize his (wonderful) vision of internet computers for all.
Intel’s machines now cost $200 and the One Laptop machines are now $175. Both think pricing should fall as production ramps up.
This reminds me a bit of our local internet broadband fiber network conflict between the city of Ashland, Oregon and Charter Communications.
Several years ago Ashland developed a great fiber network concept that would be run by the city via the public electrical utility. Charter initially tried to get Ashland to work on a project together, partly using strongarm and legal challenge tactics. When that failed and Ashland started competing with Charter for cable and broadband services, Charter countered the city by offering lower rates for cable and internet to their Ashland subscribers. This split up the customer base and created revenue shortfalls for the city project (and probably for Charter as well – my theory is that they wanted to fight this trend in other cities and were willing to take a loss in Ashland to make that happen) . So, the end result now appears to be a lose-lose deal where taxpayers in Ashland have to make up shortfalls, and Charter also probably lost money.
Perspectives vary on motivations and such, but for me the moral of the story (then and now) was that it’s better for non-profit entities to cooperate than to compete. There was a win-win in Ashland when the city could hold out the *threat* of doing their own thing, forcing Charter to lower rates and offer great services. But they foolishly chose to fight, leading to the predictable lose-lose situation.
Extending this to the One Laptop project I’d sure like to see Negroponte at least *carefully examine* all the possibilities of working with or next to Intel. If profit-hungry Intel can produce these for $200 where heavily subsidized One Laptop is at $175 there may be some room here to cooperate in an effort to get the job done.
Negroponte’s motivations in my opinion are virtuous and his integrity in this is almost unimpeachable, but that does not mean he’ll make the best decisions under the changing sets of circumstances. I’d like to see more of an open mind about this one.
Joe Duck 
I don’t know; Concord Municipal Light has “threatened” to enter the ISP biz with fiber to the home, but this does not seem to have given the slightest motivation to Verizon or whoever’s running cable this month. But Ashland has a decently concentrated population, do they not? I think the economics of running fiber to every district in Concord are probably what keeps the project in a perpetual holding pattern.
Yes, Ashland had a pretty concentrated base of about 28,000 I think. I think a key reasons the municipals can do this effectively is because they already have the power poles. However after watching the Ashland experience I think the best strategy for Concord would be to tell the cable or telcos “we want a great fiber network and if you don’t build it we will. I have a hunch that simply waiving fees/helping with infrastructure/etc would go a long way to getting the private sector involved and this would create a win-win deal. It seemed to me that Ashland’s mistake was not the idea of fiber, rather it was failing to use market forcees to their advantage.
The early promo signs for the project spelled it out clearly – a fist raised in the way the “black power” folks used to do. For many it was a battle of virtuous government project vs evil capitalist profiteering.
Caveat: I’m no expert on this and as usual I’m ranting a bit without having researched the topic extensively.
Here’s local coverage of the budget nightmares: http://www.dailytidings.com/localissues/AFN/