Should the Public or Private Sector Control Broadband?
[Commentary] On September 21, 1932, presidential candidate Franklin Delano Roosevelt addressed a big issue of the time: electrical service and who would provide it -- public utilities or private companies. “My answer has been, as it is tonight, to point out these plain principles,” Roosevelt told the crowd. “That where a community -- a city or county or a district -- is not satisfied with the service rendered or the rates charged by the private utility, it has the undeniable basic right, as one of its functions of government, one of its functions of home rule, to set up ... its own governmentally owned and operated service.”
We are at a similar transition point with fiber-optic networks, the slender glass tubes that transmit the torrents of bits and bytes that power the Internet, cable television and telephone service, as well as a range of other services, including smart energy grids. It is now clear that fiber networks need to go everywhere; they should be carried into homes and businesses and replace the antiquated copper lines. But who will install these networks and who will control them? This question is key because it will impact decades of economic growth and who will benefit from it. For a couple key reasons, many Americans are unaware of these crucial battles taking place. First, people are so used to thinking of government doing things less efficiently that it turns their head around to realize the public sector can do some things better, even supplying physical infrastructure. Second, information is fractured. Although we live in a famously information-saturated time, what’s happening in places as disparate as Philadelphia, Lafayette and Chattanooga, Tenn., doesn’t travel far.
Private companies can operate in a bubble, secure that a population one or two states over won’t know what they are doing. If the politicians falter, they should remember FDR’s words. It’s clear that fiber networks are a natural monopoly and need to be either run directly by the government, or so heavily regulated that it amounts to the same thing.
[Alex Marshall, Senior Fellow, the Regional Plan Association in New York City]