Market forces have rendered telecommunications
infrastructure in the United States a balkanized, crazy quilt patchwork.
Investor-owned internet service providers naturally gravitate toward locations where
there are high concentrations of households with healthy incomes that can
afford their service offerings. Since those services are typically vertically
integrated wherein the ISPs own the infrastructure, infrastructure is built
only where it can generate robust profits over the short term. Everyplace else
is left to twist in the wind, redlined off the internet because there is no
infrastructure to deliver telecommunications services.
That has led to a deepening crisis as telecommunications
continues its rapid shift to internet-based services as legacy telephone
companies abandon their copper cable plants constructed many decades ago to
support voice phone service.
A similar market dynamic exists in the payer side of health
care. Like telecommunications infrastructure, it takes lots of capital to enter
the market. Health plan issuers must have millions of dollars set aside to
cover the cost of care of their members, particularly if costs exceed
projections. They naturally will offer coverage in areas where there are plenty
of premium paying members to generate those dollars. In less densely populated
areas, those with fewer health care providers and lower population health status, health plan issuers have less incentive to offer a greater
variety of plans.
President Barack Obama called out this circumstance in a
recent
article
published in
The Journal of the American
Medicine Association (JAMA). The president noted that 12 percent of
enrollees in states where the federal government operates state health
benefit exchanges live in areas where they can choose from among only one or
two health plan issuers. For such areas, Obama suggests policymakers revisit the
concept of a government operated health plan – the so-called “public option” –
that was jettisoned leading up to the enactment of the Patient Protection and
Affordable Care Act in 2010. Obama’s call for taking another look at
government-operated health plans serving the individual and small group markets
comes as one of the law’s mechanisms designed to ensure greater access to
coverage -- consumer operated and oriented (CO-OP) health plans – is faltering
with
most co-ops
undercapitalized and deemed insolvent.
Given that some 34 million Americans are unserved by modern,
internet-based telecommunications infrastructure capable of delivering
high-quality voice, data, graphics and video to their homes and small
businesses
according to
figures
released by the U.S. Federal Communications Commission in early 2016, it’s
also time for policymakers to seriously consider a public option for telecom infrastructure.
In my recent eBook,
Service Unavailable:
america’s Telecommunications Infrastructure
Crisis, I propose the formation of a government chartered 501(c)(1)
nonprofit, the National Telecommunications Infrastructure Agency, to engage in
a crash program to build modern fiber to the premise telecommunications infrastructure
connecting all American homes and businesses. That’s where America needs to be
in the 21
st century. Market forces are not up to fully accomplishing
the job or as rapidly as needed.