WASHINGTON—Following the Biden administration’s budget plan today, announcing a $100 billion investment over the next eight years to deploy broadband throughout rural America, the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy, released the following statement from ITIF Director of Broadband and Spectrum Policy Doug Brake:
Biden’s broadband infrastructure plan goes overboard and threatens to undermine the system of private competition that successfully serves most of the United States.
No doubt, the United States sorely needs subsidies for rural broadband, but this isn’t an area to turn all the dials up to 11.
If not properly targetted, such a large investment risks undermining incentives for private capital to invest even where it can do so profitably, which ultimately erodes the engine of innovation for next-generation connectivity.
This is a gross misrepresentation. Telecommunications infrastructure does not and cannot practically function as a competitive market. High cost barriers and first mover advantage make it unfeasible to have multiple operators. If Brake's logic held and other utilities were a competitive market, Americans would have multiple electric, gas and water lines connecting to their homes, with each provider competing to have consumers choose their line. That's not the case because utilities function as a natural monopoly and not a competitive market.
It's also inaccurate to portray the nation's advanced telecom infrastructure deficiencies as limited to rural areas. They exist anywhere deemed insufficiently profitable by investor owned providers as the ITIF's statement suggests.
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