Monday, February 02, 2009

Let's slow down on broadband stimulus in order to consider ownership alternatives

The economic stimulus package is moving through congress. Republicans are fighting it on the grounds that more tax cuts are needed and we need more time to make sensible investments. I agree that we need to slow down on broadband stimulus to consider ownership alternatives. Here is the "elevator ride" pitch:

  • The current strategy of privatization with hope for competition under independent regulation has failed in many developed and developing nations. In the US, regulators have been unable to create competition and our infrastructure has suffered.
  • The large broadband incumbents have benefited from public subsidy, have failed to live up to commitments, and have used their power to defeat attempts to create competition
  • The US has little fiber in the access network today, but will have fiber to all urban and many rural homes and buildings in the long run. The question is not whether we are going to deploy new infrastructure; the question is “who will own it?
  • We should take the time to evaluate decentralized alternatives to near-total ownership by the incumbents. Local governments, cooperatives, small ISPs, and home and building owners might own parts of our next generation infrastructure.
  • This evaluation can be fast and cheap. The work of the National Science Foundation in designing and creating NSFNet and connecting universities, colleges and foreign networks provides an excellent example of a small government staff calling on experts from academia and industry to design a network and a strategy for deploying it, followed by procurement via competitive bid.
  • We need immediate economic stimulus, but that can come from tax cuts and investment in many sectors as well as broadband.
  • Nobel economist Paul Krugman acknowledges the need for rapid stimulus, but in this article he says we should downplay the “jump start” metaphor and focus on job creation through infrastructure investment over the next four plus years.
  • We will be living with the fiber and high-speed wireless infrastructure we build today for many decades. We will also be living with its owners.
Click here for a paper with details on the above.

Click here for a PowerPoint presentation on the above.