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November 29, 2010 2:51 PM

The Unspoken Tension Between Public and Private Broadband

One of the most fundamental arguments given in support of public broadband projects is the potential they have for delivering higher speeds for lower prices than broadband delivered via private, market-driven, profit-maximizing means.

Sure there are many other reasons people support public broadband, like the ability for communities to better control their communications future, to have networks more grounded in local interests, to protect the public interest, to make sure that less financially attractive markets still receive service, and so on.

But when you boil it all down the base argument tends to be that public broadband projects can deliver more bandwidth for less money.

This brings us to the title of this post, namely that there's unspoken tension within this dynamic that's not often addressed directly.

The tension I speak of is the reality that the cost savings touted by public broadband projects come directly from the bottom lines of private broadband providers.

While in some instances public broadband's delivering service to areas for which there are no private providers, for the most part projects like those funded by the broadband stimulus deliver service to areas where there is at least some form of private broadband.

So when government agencies tout the savings they're helping America's anchor institutions realize, what they're also saying is that the private providers in those areas were charging too much for not enough bandwidth.

To many of you this may not be much of a revelation, and some agencies like NTIA have been bolder than others in pointing out this reality, but on the whole government's rhetoric does not match its actions.

Most of what you hear government talking about is the need to connect the unserved, and yet their approach seems to suggest that they also believe that there are tremendous market failures across the country in areas considered to be already served.

This lack of acknowledgement about market failures in broadband are another unspoken reality. There's no denying that the bandwidth needs of community anchor institutions are soaring. And yet most can only afford connections like T1s that are too slow and too expensive.

In some instances, community anchors are stuck as there's no faster infrastructure available at any price and there's not the business case needed to justify private investment in delivering that capacity. In others, there is sufficient infrastructure much of which has already been paid for but the private owners and operators of this infrastructure place maximizing profits over serving their communities.

Now, it's important to note I'm condemning private operators for profiteering. Most have a fiduciary obligation to their shareholders to do so. But at the same time, if we allow the market to drive everything then we'll end up with where we're currently at, with the majority of community anchors unable to get enough bandwidth at an affordable price.

Yet at the same time, I can't help but wonder if there aren't ways to shift the playing field for delivering broadband services to incentivize private operators to deliver more bandwidth for less money, especially in areas with limited competition.

Rather than just assume the only answer is government rolling in with a wheelbarrow full of cash, are there any ways to change the tax structure to reward the delivery of higher capacity, higher value broadband? Can government focus on aggregating demand to help justify larger private investments in buildout? Are there any other creative solutions we're not considering?

In the end, I'm not advocating for public or private broadband being the best way to move forward. Instead what I'm trying to do is point out that if we continue to talk around issues and not acknowledge the realities of our situation directly, then the odds of us actually fixing our country's broadband infrastructure problems aren't high.

We need a government that's willing to speak in clear terms about the needs of our community anchor institutions and our citizens. A government who's willing to stand up to industry when the public's interests aren't being properly served. And a government that realizes the need for creative solutions that don't just rely either on the market alone or massive outlays of taxpayer dollars.

There's an unspoken tension between public and private broadband, but there are potential creative solutions for addressing this, if only we're able as a nation to acknowledge what our problems are in the first place.

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