Wednesday, May 12, 2021

Argument that public option open access fiber is unnecessary "overbuilding" misses the point

Cable companies' argument against municipal broadband is not new. Cable, they say, already blankets the country. Why build more capacity where it already exists when there are still parts of the country with no capacity at all? Besides, they argue, it's not the government's place to interfere with private competition. "The belief that municipalities deserve some type of preference in the distribution of funds and that that somehow is going to lead to some greater consumer benefit? We don't think that's true or that there's any real evidence," said James Assey, executive vice president of NCTA. That argument has gotten cable companies their way in state after state, including in Tennessee, where AT&T fought efforts by Chattanooga's successful municipal network to expand in 2016. And it's gaining ground among lawmakers in Congress too. "The proposal today would prioritize, unfortunately, inefficient government-run networks, at the expense of private networks, and create arbitrary speed thresholds that favor fiber-only projects with no restrictions to prevent overbuilding in areas where broadband already exists," Republican congresswoman Cathy McMorris Rodgers said during a hearing of the House Energy and Commerce Committee last week.

https://www.protocol.com/policy/biden-broadband-plan

The "overbuilding" argument misses the point. Building open access fiber to the home infrastructure provides a badly needed public option (and NOT market competition given telecom infra is a natural monopoly) to ensure access to and affordability of advanced telecommunications. Investor owned companies answer first to their shareholders and have no public obligation to ensure those exist. By contrast, the Biden administration's telecom infrastructure plan proposed as part of the American Jobs Plan serves the American people whose interests undoubtedly outweigh those of shareholders.

The timing of the proposed public option is propitious. Legacy telephone and cable companies lack the financial capacity to take on the job and can only invest where they can be assured of a rapid return on investment. Private capital investment is too risk averse, like the legacy providers favoring dense residential "communities" such as planned unit and multi-family development.

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