Public option FTTH infrastructure offers potential advantage of ending FCC back and forth over regulation of IP delivered services

With public option fiber to the home (FTTH) advanced telecom infrastructure proposed in the Biden administration’s infrastructure package, a key advantage would be a potential end of the shifting back and forth policy positions of the Federal Communications Commission regarding how to regulate Internet protocol delivered services.

Since they would be delivered on the service layer of FTTH infrastructure owned by public entities and consumer cooperatives, they would conform to the current FCC regime of treating them as lightly regulated information services falling under Title I of the Communications Act. It would also be consistent with the administration’s policy to promote competition in advanced telecommunications services. Information service providers would compete on a relatively level playing field if affordable fiber connections built to a national infrastructure quality standard reached nearly every American doorstep.

Biden administration telecom infrastructure policy objective is universal access and affordability, not enhancing competition

The broader problem is that U.S. government policy does nothing to promote competition. According to the FCC’s flawed broadband maps, 28 million households have only one internet service provider offering at least the minimum broadband speed. Many of the supposed competitors are phantoms. And the number of households in areas with more than one ISP offering gigabit speed service is paltry. Only two million households have that choice, or maybe many fewer—the FCC doesn’t really know at any granular level.

Biden Proposes Government Actually Try to Create Broadband Competition

The fundamental problem with this assessment is telecom infrastructure is a natural monopoly. Enhancing competition is undoubtedly good public policy in a competitive market with many sellers and buyers. However, utility infrastructure isn't and cannot practically be a competitive market due to high cost barriers to entry and first mover advantage. That's why we don't see electric and water utilities fighting to win customers by running multiple lines to households.

Since market forces cannot function well in a natural monopoly market to benefit consumers, the Biden administration's policy to create a public option -- infrastructure owned by public sector and cooperative entities -- is the best policy to ensure infrastructure reaches every American home and not just the estimated one third currently passed by fiber. That's not a pro-competition policy, but rather one aimed at expanding infrastructure capacity to better ensure access and affordability.

It's critical the administration's policy be framed as such. Casting it as enhancing competition gives incumbent telephone and cable companies ammunition to claim government is unfairly competing with them on an unlevel playing field, arguments that will resound with conservative policymakers.

The administration's plan can promote competition by establishing a strong national fiber to the premise telecom infrastructure standard as a quality benchmark to assure reliability and durability against obsolescence. As well as creating incentives for rapid completion and deployment given the nation is at least a decade behind where it should be relative to this critical infrastructure.

No need for maps of existing advanced telecom infrastructure with "public option" fiber reaching nearly every American home.

According to Sherry Lichtenberg, deputy director at the National Regulatory Research Institute, having a big sum of money with which to attack the digital divide will be important, but the key issue may actually be figuring out where to spend it all. “We still don’t really have a good map that shows where things are available,” she said. “It’s important to know who’s got service, who doesn’t have service, where service could be provided if somebody asked for it, and where people are really getting it even if they are asking for it because of the way the rules are written.”

 It Will Take a Lot More Than Money to Fix the Digital Divide

There is no need for maps of existing advanced telecom infrastructure provided the Biden administration's proposed infrastructure plan offers affordable "public option" fiber connections to nearly every American home. It's already known that only about one third of U.S. homes are passed by fiber, most of it built by investor owned providers that limit construction to cherry picked neighborhoods. 

That's unlikely to change anytime soon since their business models demanding rapid returns on capital investment drive them to target dense MDU and greenfield development. They also charge a price premium for fiber throughput, marketing it as high end "gigabit" service that makes higher income areas a priority for fiber infrastructure deployment.