Author(s): | Jacobson, Charles David |
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Reviewer(s): | Gorman, Hugh |
Published by EH.NET (December 2001)
Charles David Jacobson, Ties That Bind: Economic and Political Dilemmas of
Urban Utility Networks, 1800-1990. Pittsburgh: University of Pittsburgh
Press, 2001. xii + 282 pp. $35 (hardback), ISBN: 0-8229-4133-3.
Reviewed for EH.NET by Hugh Gorman, Department of Social Sciences, Michigan
Technological University.
In this comparative study of issues surrounding the regulation and ownership
of “natural monopolies,” Charles Jacobson covers a lot of ground and does so
concisely. If one desires to better understand the various approaches that
legislators have taken to ensure the equitable and efficient delivery of
services over fixed networks of pipes and wires, this book is an essential
read. By smoothly integrating economic theory with the specifics of how that
theory played out in various cities for the delivery of water, electricity,
and cable television, Jacobson allows the reader to examine an array of
approaches and outcomes while gaining an appreciation for broader historical
patterns.
The structure of Ties That Bind is straightforward. Jacobson first
discusses the general type of issues that local officials and firms typically
face as they attempt to reach some agreement on how to ensure that the service
delivered over a fixed network is accessible, equitably priced, and reliable.
He then examines the development of networks in the United States for
delivering water, electricity, and cable television, with one chapter devoted
to each network. Furthermore, in each chapter, Jacobson focuses on the
experience of several cities, with Boston, San Francisco, Seattle, and
Pittsburgh taking on prominent roles. The comparative array that he creates by
examining the development of three different networks in several different
cities is a major strength of the book. Throughout, he nicely integrates
comparisons among the various cases.
Regardless of the city, time period, or service being delivered, the same
major questions dominate. What relationship should be established between
governments and utilities so as to ensure the most reliable, efficient, and
equitable delivery of services? In the absence of competition, what
disciplines a firm or government agency to make the investment necessary to
maintain and improve a network? In each case, more specific questions and
issues emerged as officials made specific policy choices. For example, if a
city turned to franchises, what could officials do if a firm could not or did
not live up to the conditions specified in its franchise? Should the affected
municipality purchase and operate the network or should it subsidize private
operations to cover the level of public service desired? By examining
differences in how such questions were answered, Jacobson helps readers make
sense of the various options available to decision makers and why they pursued
the strategies they did.
Jacobson emphasizes that in each case, the path of debate was influenced by
differences in period, place, political and economic context, and technology.
Not surprisingly, the evolution of policy decisions affecting the network for
delivering water to nineteenth century Boston was quite different from choices
associated with development of Pittsburgh’s cable television network during
the last third of the twentieth century. But Boston’s water experience also
differed from the water-related experience of San Francisco and Seattle. In
Boston, civic leaders moved fairly quickly to establish municipal ownership of
waterworks in a way that facilitated expansion and population growth. In San
Francisco, water supply and distribution facilities remained under the control
of a private firm until 1930. Seattle, which established itself as a
population center late in the nineteenth century, moved fairly quickly from
private to municipal ownership, with officials undoubtedly learning from the
experiences of other cities. Similarly, chapters on the delivery of
electricity and cable television examine the development of those systems by
comparing the experiences of several different cities.
Although the path of debate varies from case to case, broad patterns emerge.
In the case of water systems, the overwhelming importance of a reliable water
supply to public life typically led to municipal control. For example, in the
nineteenth century, city after city faced the challenge of getting local water
utilities to construct distribution systems large enough to be effective for
fighting fires but inexpensive enough to be affordable. Such concerns pushed
civic leaders toward municipal control of those networks. In the case of
electric distribution networks, tremendous advances in technology allowed
participants to avoid the most contentious issues. Furthermore, the
development of regional — and eventually national — electric grids moved
regulatory responsibility to the state level, resulting in a different set of
dynamics. In the case of still-evolving delivery systems for cable television,
the story is even more different. Unlike the other two networks, the demand
for cable is relatively elastic. It cannot be considered a vital service and
has faced competition from other sources of programming, including broadcast
television, resulting in fewer calls for municipal control.
Initially, one cannot help but wonder why Jacobson chose cable television over
a third utility that is more similar to water and electricity: natural gas. On
reflection, though, the decision to examine cable television is the better
choice. Not only does this choice result in the examination of networks based
on three different physical media — pipes, copper wire, and communication
cable — but it also results in three different time periods and broadens the
range of competitive factors. Furthermore, it allows one to place a current
policy issue, the regulation of cable-based communication services, in
perspective with debates associated with earlier “natural monopolies.”
Any serious participant in any debate concerning the regulation of a service
that depends on a fixed network would benefit from reading this book. Ties
That Bind is also the kind of book that graduate students interested in
subjects ranging from public policy and urban studies to business history and
monopoly law would find extremely useful in their efforts to gain historical
perspective. In the end, Ties That Bind is a great example of history
being used to inform public policy.
Hugh Gorman is assistant professor of environmental policy and history at
Michigan Technological University. He is the author of Redefining
Efficiency: Pollution Concerns, Regulatory Mechanisms, and Technological
Change in the U.S. Petroleum Industry (2001).
Subject(s): | Urban and Regional History |
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Geographic Area(s): | North America |
Time Period(s): | 20th Century: WWII and post-WWII |