Tennessee U.S. Senate race offers sharp policy debate over public vs. private ownership of telecom infrastructure

Bredesen wants TVA mission expanded to provide rural broadband service | Times Free Press

A Tennessee U.S. Senate contest provides a sharp policy contrast between public versus private ownership of advanced telecommunications infrastructure. Former Tennessee Gov. Phil Bredesen favors public ownership via the Tennessee Valley Authority (TVA), formed in the 1930s to provide electric service in areas avoided by investor owned providers. U.S. Rep. Marsha Blackburn on the other hand opposes public ownership of telecommunications infrastructure, contending that unleasing market forces and reduced regulation will encourage investor owned providers to build the necessary infrastructure.

The history that led to the creation of the TVA however suggests market forces aren't up to the challenge. Then as now, if the return on investment isn't sufficient, the market fails on the sell side. Providers cannot earn enough profit in a reasonable timeframe to justify the capital expenditure on infrastructure. In that regard, Bredesen is on the right side of history.

That's not to say however that investor owned players and market forces cannot play a role. Privately owned providers can make money building and operating advanced telecom infrastructure and providing services over it -- and with far less risk than they would face as both owner and operator. Competition can take place in these realms. For example, Ammon Idaho is building publicly owned fiber to the premise telecom infrastructure that allows end users to select among competing ISPs.

FCC chairman: Connectivity main obstacle of telemedicine | Western Colorado | gjsentinel.com

FCC chairman: Connectivity main obstacle of telemedicine | Western Colorado | gjsentinel.com: Speaking to reporters after the meeting, Pai said, from the FCC's viewpoint, connectivity remains the biggest hurdle to a serious move toward widespread use of telemedicine. "The telemedicine application is only as strong as the digital connections between communities," said Pai, a 2012 Obama appointee who was designated director of the commission by President Trump, and a noted free-market advocate. Pai pointed to his agency's recent infusion of funds into its Rural Health Care Program, which provides funds to some health care providers for broadband and telecommunications services. He also said he is aiming to eliminate outdated FCC rules and encourage competition among internet service providers. "We want to make sure these companies have a strong incentive to upgrade to fiber, especially in these rural communities that need high-capacity internet access," Pai said.

The FCC chairman is right when he says America needs more fiber advanced telecommunications infrastructure deployment as medical care increasingly utilizes it. But it won't happen with Pai's prescriptions. Limited purpose funding such as the Rural Health Care Program will hardly make a dent in the nation's enormous accumulated telecommunications infrastructure deficit where FTTP is the exception rather than the norm it should be.

Nor can regulatory reforms address the fundamental business problem facing investor owned ISPs. Building new fiber infrastructure under their current business models cannot yield positive net present value within the limited patience of their investors' capital looking for rapid returns. And encouraging competition in a natural monopoly market that is telecommunications infrastructure is like expecting ice cream plants to grow in the desert. No meaningful competition can ever occur.

ISPs want to be hotels because luxury accomodations aren't meant for the masses

Net neutrality activists, state officials are taking the FCC to court. Here's how they'll argue the case. | National and International | napavalleyregister.com: But tech companies and consumer groups told the court Monday that third-party services routinely carry out those same functions, and that ISPs cannot lay claim to lighter regulation just because a portion of their business is involved in performing them. "The FCC could not have reasonably concluded that a drop of DNS and caching in a sea of transmission transformed the service into something that could properly be called an information service," the brief said. The overall impression, the group said, is that of trying to deregulate all roads that lead to hotels by simply reclassifying the roads themselves as hotels.

Hotels are often seen as luxury accommodations compared to say Motel 6. The analogy here fits nicely with the legacy incumbent telephone and cable company opposition to being regulated as a common carrier telecommunication utility -- and thus barred under the now repealed FCC Title II rulemaking from redlining and discriminating against neighborhoods they choose not to serve.