White House: Municipal Broadband will Expand Internet Service and Increase Competition

Last March, President Obama announced a comprehensive plan to bring high speed Internet to more Americans. Specifically, rural areas and low-income households. The Broadband Opportunity Council aims to bring faster Internet to the 75 million that are without a high speed connection in their homes.

Currently, many states have laws that restrict local municipalities from building public broadband infrastructures. The consequence of these laws is that only major providers can build, own, and control the roads on which our Internet information is delivered. Naturally, the profit incentives in low-density and low-income areas are not attractive enough to entice major providers into building new broadband infrastructure in those areas.

In light of this reality, the White House has announced new goals to spur such investment — and its Broadband Opportunity Council has set four main goals for broadband program:

  • Modernize Federal programs to expand program support for broadband investments.
  • Empower communities with tools and resources to attract broadband investment and promote meaningful use.
  • Promote increased broadband deployment and competition through expanded access to Federal assets.
  • Improve data collection, analysis and research on broadband.

“Over the past six years, under President Obama’s leadership, the United States has expanded broadband access, bringing millions of people online and creating significant new economic, educational and social opportunities.” – White House blog

The program spans several government agencies, such as the Department of the Interior, U.S Department of Agriculture, and the Community Facilities program. The plan also calls for close cooperation between communities, the private sector, local government, and the federal government.

In such a narrow market, current Internet providers often have little incentive to provide good services to customers because many areas are only serviced by a single provider. This is a direct result of an industry in which the service provider owns the mediums that deliver the services. As a result, the ‘barriers to entry’ for any new service provider are incredibly high.

The goals of the Broadband Opportunity Council will move the Internet in the direction of becoming a public utility, which would shift more ownership control over the information super highway to local municipalities. Proponents argue that this will allow multiple service providers to compete over the same broadband infrastructure, which will benefit consumers by providing more choice.

The Internet is a road. And service providers drive the cars that deliver Internet to your home. Having open roads is likely to increase competition for consumer satisfaction because customers who don’t like a given service provider can simply ask for a better car to drive the Internet to their house.

Critics will argue that allowing local government to ‘own the roads’ will increase the size and scope of government, and open the door for further regulation that could actually decrease competition in the long-run. Regardless, as the debate over ownership of the information superhighway continues, the discussion should focus not on “big government” v. “big business,” but on how the complex interplay between federal, state, and local authority creates the type of competition that results in the delivery of quality services to consumers.

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