James Farstad Value-Added Networks Subscribe to Newsletter Tell a Friend Print this Page 09/11/2007 Comments on "Irrational Exuberance" Alan Greenspan, the former Chairman of the U.S Federal Reserve, was known for his often impenetrable use of the English language.  Every once in a while, however, he would come up with a phrase that was clear, succinct and memorable.  The term irrational exuberance was Greenspan's most famous quote. The term "irrational exuberance" is often used to describe a heightened state of speculative fervor.  Immediately following the speech at the American Enterprise Institute on December 5, 1996 where he used the term, markets across the globe fell 2-4%.  The speech was about the challenge of central banking in a democratic society and he pointed out the risks associated with escalated asset values.  He reminded the audience that rapidly changing technologies were necessitating the thorough review of banking operations when improvements were made cost effective by the newer technologies. Near the conclusion of his remarks that evening, Chairman Greenspan said, "Along with our other central bank colleagues, we are always looking for ways to reduce the risks that the failure of a single institution will ricochet around the world."  We find ourselves at a similar inflection point today in the municipal broadband marketplace.  The past 30 months have been nothing if not irrationally exuberant, the perceived value of both municipal and service provider assets have soared during this period to a point where proposed business models make little sense, and the apparent failure of a single service provider is reverberating across the globe.  The shock of the moment is less permanent than it is espoused to be and has been more predictable than contributors to this mayhem are likely to admit.  Three key elements of a successful business strategy include; prioritized and well understood goals, clearly defined roles and well coordinated actions.  It's time to look in the mirror.  The municipal broadband initiatives that will succeed, whether they utilize Wi-Fi, WiMAX, FTTH or a combination of appropriate technologies, are those initiatives that are developed to meet a set of realistic, prioritized business requirements and reflect an equitable balance of investment dollars, asset contributions, service level expectations and business commitments.  Those that don't won't. The next several quarters will likely be a time of high minded hindsight, marketplace restructuring and a more measured pace of cautious deal making.  It will also be a time of increased product innovation, advanced application development and balanced business agreements.  It's time to focus on community and business improvements made cost effective by the appropriate application of broadband technologies. James Farstad is President of rClient in Minneapolis and, for the past two years, the city's principal consultant on its broadband-wireless implementation. He moderates the Service-Provider Executives and Local-Government CIOs Roundtable at the W2i Digital Cities Convention. back Related Items: • Rockville, MD • Wall Street Awaits EarthLink's Restructuring Moves • EarthLink's Berryman Upfront on City Partners • Brad Mayer, IT Director, Chaska (MN) Comments No records were found. Post new comment: Only registered users can add comments. Please Log-in

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