Friday, January 10, 2014

Protectionist policies called greatest regulatory threat to fiber to premise Internet infrastructure expansion

Over the past decade, much of the United States has experienced market failure because incumbent telco and cable companies are unable to serve all premises in their service territories with legacy metal wire infrastructure. They have also been unable to modernize and build out their aging infrastructures with modern fiber to the premise (FTTP) infrastructure able to accommodate expected exponential increases in future bandwidth demand.

At the same time, however, they have sought protectionist policies barring public sector providers from doing so with lower cost business models financed by more patient capital that doesn't require a high, short term return on investment. From their perspective, their service territories whether they fully serve them or not are their proprietary franchises. Hence, the need for protectionism to keep others out.
"They will do nothing, Mr. President. Building out FTTP is an option the incumbents cannot choose."
Writing in the November/December 2013 issue of Broadband Communities magazine, Steven S. Ross terms the incumbent agenda for protectionist policies that institutionalize Internet infrastructure market failure "perhaps the biggest regulatory threat to new FTTH (fiber to the home) deployments."
In fact, looking toward 2014, perhaps the biggest regulatory threat to new FTTH deployments is a push by politicians in many states to restrict municipalities and other public entities or public/private partnerships that want to build their own networks where incumbent providers (typically milking old, obsolete systems) refuse to do so.
Click here for the full article (.pdf)

The New America Foundation issued a critical report on U.S. Internet service on January 15, 2014. It urges the U.S. Federal Communications Commission work with Congress and other stakeholders to implement the 2010 U.S. National Broadband Plan’s recommendation that state-level barriers to municipally-built Internet infrastructure be eliminated.

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