Muni Broadband: The Good, the Bad, and the Ugly - Page 2

By Marlon Schafer

January 04, 2007

Intervention is unfair competition

I do have to laugh when people try to compare the internet to electricity, roads, or water. Just what we need in communications!!! Boston traffic jams, California rolling blackouts, or Arizona's version of a lawn. Oh yeah, that would be my broadband dream! (Deep Sigh)

Okay, the last time I looked, gas stations work pretty well around here. I can walk into a grocery store and get food any time of the day or night. Shoot, I can even go to the doctor any time I feel the need! Wait! How can that be? Those are things absolutely necessary to life. The local plumber, carpenter, mechanic etc. all service people without heavy handed government regulation. NOR do they have to try to compete AGAINST government entities offering the same goods and services.

The question begs to be asked. Why do our communications need to be offered by (or controlled by) the government? Communications are no longer a natural monopoly. There are thousands and thousands of providers of communications. Toss in the content providers and there are hundreds of millions (you and I are content providers when we send e-mail, talk on the phone, send faxes etc.). So, again, why the need for governments to build networks?

I can think of one example of where I'd clearly support government provided communications networks. When government's job is to care for people rather than to protect them, government clearly should provide communications as yet another necessary service. Countries like China, the USSR, France, etc. People who are unable to construct their own networks should be cared for by their governments.

I'm kidding. Mostly. Kinda.

Should a city like Portland, Ore. that's had cable internet, wireless internet, DSL, and satellite access for many years be spending any taxpayer money to build a network that competes with private businesses? Is it proper for Boston, Mass. to install a network that would compete with companies like Towerstream or any other broadband provider?

The justifications are certainly valid. When there are areas that have no service, we all want them to get advanced communications, including broadband. We all want economic growth. We all want greater access to information, life saving services, entertainment, and all of the other things that come with a broadband connection. Heck, we all want our public safety folks to be as efficient and as effective as possible.

However, if we look at history, is government really, honestly, a good choice for offering those goods and services? How often has government guessed right at the next big technology (remember Y2K, last year's fiber to the home networks, etc.? Did government create the telephone, automobile, airplane, plastic, rubber tires? Sure, government has funded people that have created amazing products. NASA's space program has brought us a wealth of ideas. The dialysis machine, cat scans, smoke detectors, portable tools, and many others. The list is long and impressive. I think we can all agree that the exceptions are few and far between ,though. Mostly, most of us think of government as the ones in the way of our daily lives, the ones with one guy working and three leaning on shovels.

End the USF

I think that the real reason government wants to be so deeply involved in the communications industry is more a matter of power and control than it is making sure that services are offered to people that aren't getting them. In my years in the broadband industry, I've consistently seen examples of government spending money far in excess of what it would have cost them to fund an expansion of my business. Lets think about this carefully for a minute. What's usually better? Building another car, or just replacing the tires that are worn out? Do we build new electrical lines beside every one already there or do we simply find ways to help the companies with expansion of their lines.

In the telecommunications industry there is a program called Universal Service Fund. It's a cost recovery mechanism put in place years ago to help providers in low density or otherwise high cost regions build and maintain networks that otherwise couldn't be build or maintained. The idea is sound. It's certainly important for people outside of the large cities to be able to communicate with people in the large cities. It's also important that we keep roads into low density areas so that farmers and ranchers can get food into the cities. As an idea, USF is great. Its implementation has turned out to be less than ideal. You see, it was created as a cost recovery mechanism. The more money a company spends, the bigger the check they get. Wouldn't it be great if the more you spent the bigger your tax refund?

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