Thursday, March 01, 2007

A National Broadband plan? Europe and Eisenhower Show the Way

Everybody from Lafayette's Mayor Durel, to Jim Baller of Baller-Herbst, to Michael Dell of Dell Computer, to the president of the United States seem to think that we really, really ought to have a working National Broadband plan. We should. And friends, it's not rocket science.

We're not nearly as clueless as we think. Some developed Western countries have figured it out--their experiences should apply to ours. Filter that through the US' own success in building a complex, expensive national infrastructure network and you've got a pretty detailed outline.

The European Experience:
VuNet reports on the Fiber To The Home market in Europe. While France, Scandinavia and The Netherlands are deploying significant fiber, the rest of Europe is not moving forward. The article notes that:

"In part, this is due to a lack of initiative from utilities and local authorities, but also because markets are dominated by incumbents and cable operators which have no incentive to make hefty investments in brand new infrastructure."

...Generally speaking, there is less interest in building FTTH networks from conventional national telecoms operators, which argue that the approach is too expensive to carry out on a widespread basis.

...The majority of former state-owned monopolies, for example, have instead committed to fibre-to-the node.

Sound painfully familiar? It should. That could be AT&T they're talking about. Incumbent duopolies have little incentive to build new systems which would provide abundant bandwidth when they can continue to sell an expensive, scarce resource over a paid for, if antiquated, network. The US is in exactly the same fix.

What's the solution? Don't worry about cajoling the incumbents. Find a infrastructure provider that is differently motivated. Sweden shows how that works:

FTTH is most advanced in Sweden, where the technology is used for 650,000 broadband subscriptions, or over 27 per cent of the country's 2.3 million residents.

The study pointed out that the 150 municipal networks serving these customers tend not to be owned by conventional telecoms operators, but by utilities or local authorities.

So Sweden, with about 2% of the EU's population has more than half of its fiber-connected homes and a take rate (NOT homes passed, actual subscriptions) of 27% of the population. That is amazing.

You'd think any country that wanted to figure out how to encourage real broadband and extensive use in a modern Western economy would take a lesson from this. Here's a proven national strategy: encourage local communities to take on the task. They know what their citizens need. They're willing to take the longer view. They've got no baggage of old networks to protect. And they're not interested in squeezing the maximum return out of their customers.

The American Experience:
The Eisenhower Interstate Highway System.

No one any longer argues that the Interstate Highway System wasn't the best economic investment since the Louisiana Purchase. The return on investment has been astronomical and it hard to imagine the modern US economy without it.

That system is owned and operated by the states and the states provide 56% of the funds necessary to build and maintain them. There is an elaborate set of standards and inspections and a significant amount of federal "guidance" in contracting and costing.

An extensive, expensive, successful state-of-the-art national infrastructure has already been built in America. We know how to do it. Just apply the lessons learned:

So here's a real national strategy in a nutshell: Adapt the Interstate Highway model to a municipal ownership model.
1) Offer a 60-40 local/federal split to communities everywhere for the expensive last mile builds on their locally-owned rights-of-way.
2) Offer the same for the states to build the interconnects within their own states and tie-ins to neighboring states using rights-of-way along state highways (and their interstates).
3) Every community decides how much it wants to spend and the nature of the network they want; if it accepts the Federal money it adheres to federal rules in its construction and maintenance.
Sure there are details. I, for one, would impose traditional common carriage rules on the communities that accept federal money or federally funded interconnects. And I'd want a "no speed limit" clause built into the law. (Yes, that's a joke.)

But those sorts of things would be extras. They'd not be necessary to accomplishing our national goals. The above is all that is critical. In a decade we'd have an "Interstate High Broadband System" that would be the envy of the world.

No comments: