So, Obama is going to give out US$8 billion for a smart grid []. I think we should go one step further: a nationalized grid, and not just for electricity.

A lot of people will hate this idea outright just because I used the n-word (“nationalization”), but hear me out.

Here’s the crux of the idea. The Federal Government is in charge of inter-state commerce issues. This is why it handles the interstate highway system. As a component of national infrastructure the crosses state lines the interstate highways are administered by the Department of Transportation. I think that the national electricity grid, the data communication network deserve the same treatment. As such I would create a new Department, for fun I’m calling it the Government Regulated Infrastructure Department or the GRID.

To start with the GRID would take ownership of all things related to the federally administered roads (and maybe some of the other physical infrastructure the DOT administers.) Then they would start to buy existing electrical transmission infrastructure and data communication network infrastructure. They would also be responsible for upgrading and building new infrastructure (the internet core is getting old and needs to be replaced, the electricity grid is a dinosaur.)

How would this affect the existing power companies and ISPs? Well, the GRID’s remit would only be the big interstate elements not the ‘last mile’. Just like roads the DOT builds (or pays for the building of) the interstate highways but you can’t get to your house just on the interstate highways, you have to use the local roads. Unlike the local road the GRID would lease connectivity to the interstate infrastructure to local service providers, provider A would connect it’s power station to the GRID at one end and then connect it’s local transformers or whatnot to the GRID at the other end before delivering the power the last mile to your house.

This is a half formed idea I admit and I don’t know enough about either electricity transmission or the Internet core to understand all the complexities but the Government could hire those people to work out the details. I just think that having the physical infrastructure owned by the government for electricity and data transmission would improve competition and actually promote capitalism by lowering the barrier to entry for new providers — taking away the regional or local monopolies. So in the end I think the idea is pro-capitalist not socialist, even though you have to pass through the forest of nationalization to get there.

An added bonus today would be the massive investment required to purchase and build out this system — jobs for people and cash flow for businesses.