Saturday, January 07, 2006

Broadband and Federal Policy

From the Washington Monthly,

Well said:
"The countries surpassing the United States in broadband deployment did so by using a combination of public entities and private firms. The Japanese built their world-class system by ensuring “open access” to residential telephone lines, meaning competitors paid the same wholesale price to use the wires. The country is also establishing a super-fast, nationwide fiber system via a combination of tax breaks, debt guarantees and subsidies. But of particular note, the Japanese government also encouraged municipalities to build their own networks, especially in rural areas. Towns and villages willing to set up their own ultra-high-speed fiber networks received government subsidies covering approximately one-third of their costs.
Unfortunately, the United States has pursued the opposite policy. President Bush has called for “universal, affordable access for broadband technology by the year 2007,” and FCC Chairman Kevin Martin claims broadband deployment is his “highest priority.” But they have made no progress toward these goals; in fact, they have rewarded their corporate cronies for maintaining high prices, low speeds and lackluster innovation. Federal policies have not merely failed to correct our broadband problems, they have made them worse. Instead of encouraging competition, the FCC has allowed DSL providers and cable companies to shut out competitors by denying access to their lines. And whereas the Japanese government encourages individual towns to set up their own “Community Internet,” Washington has done nothing. Fourteen states in the United States now have laws on the books restricting cities and towns from building their own high-speed Internet networks. No wonder America is falling behind its Asian competitors."
Having set the stage the article goes on to call on my favorite evidence for the value of municipal broadband: the history of municipal electricity, and then finishes with a scathing review of the hypocrisy of the incumbent providers.

Well worth the read. Go get it.

2 comments:

Anonymous said...

The countries surpassing the United States in broadband deployment did so by using a combination of public entities and private firms. The Japanese built their world-class system by ensuring “open access” to residential telephone lines, meaning competitors paid the same wholesale price to use the wires.

Sounds great, unfortunately that's not what LUS is doing in Lafayette. The LUS fiber to residences is closed to competitors. The LUS plan is a "closed" system. And just try to get 3 megs from LUS or their retail agents for your business. Tell me what the cost is?

John said...

anon,

If you've been around for a while, and from your post I think you probably have been you'll know I ask for names on this blog...tends to keep things honest.

At any rate you're half-right, and pretty much totally missing the point (IMHO).

The half-right part is that LUS is not doing a wholesale system. (Neither are its competitors) But, LUS has pledged to leave its IP open. They are quite aware that that eventually it will all be IP. They will sell voice, cable, and Net conntectivity...playing in exactly the same ballpark by the same rules as their competitors. It's how we'll pay for the system here.

But the point I think you've missed is that this article is about the dramatic failures of the federal broadband "policy"--such as it is. LUS is forced to play in the sandbox bounded by the FCC and national policy.

The other nations, whose policies you profess to think are great, are spending large amounts of national dollars and big subsidies--often to quasi-governmental agencies akin to our post office--to make sure that broadband is pushed out into every corner of the nation. And they are requiring every private network owner to play by the wholesale rules. We had a pale imitation of that when the Bells were being held to common carriage rules. But the FCC in return frankly for nothing but vague promises about deploying fiber, let the bells run the EATELs and the ATTs out of the market. You'll see no more of those good deals. I'm presuming you didn't deliberately overlook the part where the national government of these companies extends the encouragement of network building to municipalities favoring and subsidizing these as well.

The point is, other nations are not relying on some sort of semi-religious ideology that sees perfection in the "invisible hand" of the market. They are making their future and driving broadband adoption by subsidizing the extension of broadband into not-immediately profitable geographies, forcing private providers to open their networks, and encouraging local government network construction.

My point is: If we had such a regime here the US would still be number one in broadband adoption, rates would be dirt cheap and Lafayette could build its own network with federal support.

In such a regime I imagine that LUS and the city would be happy to play by the same network rules the private providers are asked to follow. Until that time they play in the game that has been largely designed by the incumbents. To succeed they have to win at that game whether they (or I or you) like the game or not.

Fair's fair don't you think? Are you willing to ask the same of Cox and BellSouth that you desire of LUS?