Thursday, March 20, 2008

Burlington Telecom head: Broadband infrastructure a natural monopoly that should be publicly owned

Here's a guy who really understands the economic big picture when it comes to broadband infrastructure: Tim Nulty, director of Burlington Telecom, which built a publicly owned broadband system serving the city of Burlington, Vermont.

Nulty sets out crystal clear guidance for public policymakers on broadband infrastructure: it's a natural monopoly that by its very nature can't foster robust market competition to ensure the needs of the public are met. Hence, Nulty says, it should be in the public rather than private sector like roads and highways. Nulty's observation has enormous implications for the current misguided notion being embraced by some states at the behest of AT&T that state regulation preempting local governments will lead to a competitive market for advanced services. AT&T's approach creates a duopoly of telcos and cable companies and a duopoly does not a competitive market make.

Here's an excerpt from a recent profile of Nulty appearing in Vermont's Business People magazine:

He likens his fiber-optic superhighway to a more commonly understood network. "Nobody thinks twice about the roads being in the hands of the public," Nulty says. "The thought that a private company could own the roads and charge whatever they pleased to anybody who goes on them is ludicrous anywhere in the world. That's what this is: the public roads."

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