Government’s Role in Broadband

capitalIn a discussion in one of the many industry forums where people chat and exchange ideas, I received some pushback the other day after I said that, “It’s governments role to bring broadband to everybody.” The primary pushback came from commercial ISPs who said it should be the private sector’s role to bring broadband and government should not be competing with private companies.

I’d like to expand on what I meant by my statement. Let me start by discussing how the private sector has done with bringing broadband. Most cities and suburbs these days have broadband of at least 25 Mbps download, and in many places faster broadband is available. And there is now a long list of rural places that now have fiber networks built by telcos and cooperatives that have speeds faster than in most cities.

But even as speeds are increasing, most of us yearn for more competition and better prices. Yet only 4% of census blocks in the country have at least 3 ISPs offering 25 Mbps or greater. However, competition aside, a lot of people in the US have good broadband available if they are willing to pay the price.

But the latest FCC statistics still show that 29% of all census blocks in the US don’t have an ISP that offers 25 Mbps or faster broadband, and 53% of census blocks don’t have an ISP that offers 100 Mbps. The FCC still estimates that there are about 20 million people in the country with no landline broadband option at all. And while there continues to be construction of rural fiber in some parts of rural America, the number of homes with no landline connection will grow quickly if AT&T and Verizon abandon rural copper.

To be fair, WISPs have stepped into a lot of the areas with no landline broadband and are offering an alternative with wireless broadband. And some WISPs do a great job and I know folks who have wireless connections of 30 – 50 Mbps. In today’s world that’s great broadband for the average household. But there are also a whole lot of WISPs that don’t deliver decent broadband. I hear stories every day of people having WISP connections under 5 Mbps, and often with high latency. Many WISPs are either unable or unwilling to provide for the backhaul needed to deploy the wireless technology to its full capabilities.

My overall conclusion is that commercial providers have failed a lot of Americans. Many of these customers are rural where it’s hard to serve. Or some just happen to live where there is no competitive ISP in the market. But we clearly are now a nation of broadband haves and have-nots. And because the demand for both speeds and total download capability continues to grow at a rapid pace, I believe the areas with poor broadband are far worse off compared to their urban neighbors than they were five years ago. Where a 3 Mbps connection might have satisfied a household five years ago, today it is inadequate and within a few years it will feel as slow as dial-up to somebody trying to take part in the modern digital world.

And so I still stand by my statement that it’s the government’s role to get broadband to those parts of the country that don’t have it. That doesn’t necessarily mean that government needs to build and own broadband networks, although local communities willing to spend their tax money to get broadband ought to be allowed to make that choice.

But government needs to play the same role with broadband that they did a century ago with electricity. When electricity exploded onto the scene, commercial companies sprung up all over the country to build electric networks to fill the demand. But it soon became obvious that huge geographic parts of the country were not going to get electricity. And so government stepped in to fill the void. Numerous municipal electric companies were started in small towns where no commercial company filled the gap. At the federal level the US government funded big projects like the Tennessee Valley Authority to generate power for rural areas. And the feds developed low interest loan programs that aided cooperatives and small rural electric companies to be able to afford to build the needed infrastructure. Without these programs there probably would still be significant parts of the country without electric grids (and such places would be abandoned ghost towns).

I see government needing to fill the same role with broadband. I think it’s becoming clear that communities with no broadband are going to wither and fade away over time. These areas won’t have many jobs and kids will go elsewhere when they finish high school. Home prices will tumble and areas without broadband will begin a long slow decay.

I don’t have any particular preference as to how the government helps to fill the broadband gap as long as whatever they do works. There could be more significant grant/loan programs. There could be tax incentives or other ways to promote private money to build broadband (more things like New Market Tax Credits). And perhaps cities can demand that ISPs serve every home in a city in the same way that used to be done with cable TV franchises. But I am convinced that if government doesn’t step into this void that nobody will. We already have all the market evidence we need to understand that there are a whole lot of places in the country where no commercial entity is willing or able to serve today – and that gap is widening, not shrinking.

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