Cable giants, electric co-ops battle over federal broadband dollars - Mississippi Today

But Mayo Flynt, president of AT&T Mississippi, told lawmakers: “We do think this is a job for the private sector and not the government sector to do … Scale is your friend, you’re going to get more return for your dollar, and this is a scale business … We believe that a competitive process or (requests for proposals) is going to help you get the best bang for your buck. Competition is a good thing. We are in the game and are competing.”

In 2019, the Mississippi Legislature passed a law allowing electric cooperatives to provide internet service — an effort to expand broadband access in a poor, rural state where an estimated 40% of the state lacked access. The effort has been likened to providing electricity to rural Mississippi in the 1930s. Proponents said large cable and telecom companies were failing to expand service into rural areas because it wasn’t profitable enough. But cable and telecom providers say they have spent millions in private funds expanding internet service in Mississippi, and that they shouldn’t be cut out of government funding for expansion.

 Source: Cable giants, Mississippi electric cooperatives battle over federal broadband dollars 

AT&T's Flynt is right. Telecommunications infrastructure like most infrastructure due to the high cost of constructing and maintaining it benefits from economies of scale. But that's not an argument against public ownership for which the American Rescue Plan Act targets funding. Rather, it helps make the case that the federal and state government should take a regional approach to ensuring fiber optic connections reach every home, school and small business to attain optimal economies of scale and purchasing power. Especially given constraints in the supply of materials and labor that can add further delay to badly overdue deployments.

There are roles for legacy telephone and cable companies in this important task. They have experience and expertise in designing, building, operating and maintaining telecommunications infrastructure. Since their business model constraints do not allow them to provide universal fiber to the premises service and instead build in areas where they can garner the most rapid return on investment, these functions rather than vertically integrated ownership of infrastructure and services is the best public policy here. These players can get some of the federal dollars but should do so as contractors on regional open access FTTP projects undertaken by the public sector and consumer utility cooperatives.