concept second | The premise being: That over the past few decades there's been a great expansion in our knowledge about routing, switching and networks; That even after all this time the cyber world and the real world are fairly separate, that they're bound to start cross-pollinating sooner or later, and that it might-as-well be right here, right now; That top-down systems don't fit well with real life, and bottom-up systems do; That cars are a bad thing; That for any system, no matter how good, there has to be a path of growth. Bearing all that in mind:
Consider a network of pipes. The pipes are at least 300mm in diameter (enough so that a stack of DVDs could fit inside) and come in segments, straight or a junction. The junctions are three way, and are able to route a packet coming from any direction to either of the other two, to propel said packet, and to message ahead to the next switch so it can prepare. It's a mechanism for distributing physical objects, in packets (the packet being a cylinder labeled with its destination address), with all the smarts located at the junctions/switches -- and what's more, based on current technology built up on the internet. We're brilliant at routing, but the expertise and the networks haven't yet infiltrated the real world. They're bound to.
The network starts as a single loop around a single building. As other buildings want to join, extensions are made, straight segments swapped for junctions without having to rewire the entire network (no central control, remember). Backbones and ring mains are laid around cities as other infrastructure is buried. Networks are joined together. Eventually we have a distribution system covering entire cities.
But this is only the proof of concept. What is the underground system, or the railways, or the roads other than a network, a switch at every junction? This is the future of transportation. (Although the concept of 5% packet loss scares me a little -- one in twenty commuters accidentally routed 1000km away, never being heard from again.)