Government's role in broadband support

by Stephen Hardy

The U.S. General Accounting Office (GAO) recently released a report that compared the Federal Communications Commission's (FCC's) proposed National Broadband Plan (NBP) with similar initiatives in other countries. A look at how the NBP differs from the successful strategies of others both illustrates a central trait in the U.S. character and raises questions about the plan's ultimate success.

The GAO looked at broadband deployment and adoption data for 30 developed countries within the Organization for Economic Cooperation and Development. It then examined more closely seven countries with demographic and economic similarities to the United States whose broadband strategies had enabled them to leapfrog the U.S. on international deployment and adoption rankings. The countries included Canada, France, Japan, the Netherlands, South Korea, Sweden, and the United Kingdom.

The seven countries, the GAO found, took similar paths toward broadband success. Their actions could be grouped into five basic steps:

  1. Establish plans and policies to guide deployment and provide leadership support
  2. Provide government funding through public/private partnerships
  3. Promote competition
  4. Implement strategies to make broadband services more available and useful to consumers
  5. Provide digital literacy training and consumer subsidies.

The GAO then laid the four basic tenets of the NBP across these five principals and decided that they matched fairly well. However, differences were found in tenets 2 and 3, particularly as far as the government's role.

For example, representatives from the seven countries emphasized the importance of government assistance in spurring private entities to deploy broadband in areas that don't support a profitable business case. Of course, the broadband stimulus program aimed at just these targets. But the stimulus funds aren't considered part of the NBP. The FCC does not specifically recommend such partnerships, the GAO points out. This may prove to be of concern to the fiber-optic industry, as the GAO found that government involvement proved particularly necessary for private parties to foot the cost of comparatively expensive fiber builds.

But it is in the area of promoting competition that the NBP differs most strongly from the plans of the other seven countries. The GAO found that in six of the seven, infrastructure unbundling was a key competition strategy. That includes, in at least three cases, unbundling of fiber assets, whether virtually or in actuality. The FCC, of course, has unbundled copper assets, but not fiber. The GAO also found all seven countries regulated the price incumbents could charge for infrastructure access–a practice the NBP does not endorse.

These differences, of course, can be ascribed to faith in the capitalist system, as well as a mistrust of allowing the government to get mixed up in the private sector–both quintessential U.S. traits. But caution must be taken that national character does not derail the achievement of the NBP's goals.

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