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Chapter Summary

Graham, Stephen and Simon Marvin. 2001. Splintering Urbanism: Networked Infrastructures, Technological Mobilities, and the Urban Condition. London, UK and New York, NY: Routledge. (Chapter 4)

New technology is one of the main drivers of private infrastructure segmentation and the unbundling of networks. In particular, advances in technology help to reduce the conditions for the existence of natural monopolies in infrastructure supply by (i) lowering transaction costs and removing barriers of entry for new competitors; (ii) enabling the unbundling of integrated networks through the implementation of new control, management, and monitoring techniques; (iii) increasing the range and quality of available services; and (iv) expanding options to deal with changing consumer demand.

The splintering process can take three different forms, which are not mutually exclusive:

  1. Vertical: segmenting each activity in the supply chain,
  2. Horizontal: separating the actions by markets, including by geography and sector,
  3. Virtual: superimposing new competitive services over existing monopolistic elements of unbundled infrastructure.

Prior to infrastructure segmentation, however, the marketability of a given project is individually evaluated by private investors, removed from a comprehensive, centrally-planned approach. Marketability is determined by the nature of the service: its rivalry and excludability (public, private, common pool, toll goods) and the conditions of its provision (cost of production and sunk costs). Investors also weigh the potential environmental externalities and social objectives, as well as the characteristics of users demand for the service (available substitutes, price elasticity of demand, information availability, and diversity of users). If the project survives the marketability assessment, unbundling is implemented using some form of privatization and/or deregulation by the state. A number of public-private contractual arrangements have emerged, including service provision, management, leasing, and concession.

In reality, the practices of splintering urbanism are too complex to adhere to simple categorization. Moreover, these practices do not work for every form of networked infrastructure, government, or geography. In reality, different combinations of approaches emerge that are uniquely structured to accommodate the type of government, consumer, and service. Regardless of the form of the splintering, the process results often results in infrastructural bypass, which takes three broad forms:

  1. Local Bypass: the direct physical development of a parallel infrastructure network for consumers who can afford services, thus bypassing the non-valued users/areas in a city.
  2. Glocal bypass: the direct connection of local valued users/areas to global supply chains.
  3. Virtual network bypass: the use of technology to facilitate the distribution of goods and services over existing integrated networks, delivering premium service to select users/areas.

These bypasses result in a new style of planning urban specialized zones and enclaves in cities for special consumers who are provided with specialized goods and services.