Thinking About A National Broadband Plan

from the not-too-hopeful dept

When we first heard about President Obama's "broadband" stimulus, we worried that it was nothing more than a boondoggle for incumbents rather than an actual broadband plan. One of his top advisors, Blair Levin, effectively acknowledged that by admitting that the stimulus package really had little to do with stimulating broadband, and a lot to do with stimulating jobs. As such, they were a lot less interested in disruptive innovation, and a lot more interested in projects that would require hiring tens of thousands of people to dig ditches (though, it's worth pointing out that the broadband stimulus has enough strings attached that the incumbents appear to be balking at it). However, Levin said that a real broadband plan would be coming up soon enough.

And, in fact, reports are now coming out that the administration has gone to work on creating a real national broadband plan. As with all things, the devil will be very much in the details. There is some fear that a "national broadband policy" won't mean much more than to hand Connected Nation a lot of power, which would do little to help things. Connected Nation is an incumbent-backed operation that gives off the appearance of "mapping" broadband connections, but really seems designed to deflect interest in the real issues: such as enabling real competition in the broadband space. Hopefully that's not where things go.

The good news is that (unlike with IP issues), the administration has either brought on or is working with a fair number of folks who do grasp some of the real issues here, such as Susan Crawford. So, what would a better broadband plan be? One that is focused on competition. In the Wired link above, Ryan Singel suggests that the administration look closely at the new national broadband plan announced in Australia, where the government will fund a new company to the tune of $43 billion (US) to lay fiber optics capable of 100 Mbps to 90% of all Australian homes and schools (and wireless at 12 Mbps to the other 10%). The company wouldn't be a retail ISP itself, but would then sell access to ISPs to offer competitive services on the network.

This is an idea that should be studied carefully, and is quite similar to ideas we've been discussing for years. The thinking is that high speed fiber optics represent a natural monopoly. That is, it's expensive to set up that platform, and it makes little sense to have multiple companies compete to create their own, because the negative externalities are massive (lots of companies digging up your yard to run fiber, plus too much investment with many of the companies failing). So, like the highway system, the thinking is, figure out a way to build a single system that is then open for anyone to use. Then, on top of that platform, you offer real competition, as any ISP can offer services and they can compete on real service. The idea is that, just as the interstate highway system helped enable increased shipping and travel, so too would a national fiber optic plan create increased digital opportunities. It's a compelling argument, though there are some who aren't convinced that broadband is a natural monopoly. My problem with the Australian solution is that it's too slow. It's aiming at a target that isn't fast enough, and would likely need to be upgraded too quickly. For a system like this, you need to aim as high as possible.

A more practical and politically-supportable option might be to do something more along the lines of the Homes with Tails idea, whereby we further push ownership of the connection out to the curb. The idea is that every home would pay for and own the fiber optic connection from the home to the curb (the infamous "last mile" which the incumbent providers complain is too costly to build themselves). But, then, once you reach the connection point, any service provider on that network can offer to provide service to that "tail." Again, there are many questions raised by this proposal as well, but it's an interesting one to explore and see whether or not it has any merit.

There are some other intriguing possibilities out there as well, and hopefully the administration and the FCC will explore all of these seriously. The worry, of course, is that lobbyists will get in the way, and work to make sure that any such broadband policy really just means giving them more money, subsidies and power -- rather than actually encouraging competition. So, consider this yet another opportunity to see how much influence lobbyists have over the new administration.

Filed Under: broadband, fiber optics, homes with tails, national broadband plan