Lee Schafer

[Commentary] Broadband isn’t a public good. The term public good comes from economics and definitely doesn’t mean what politicians are talking about when they insist that something needs to be done for “the good of the public.” A pure public good is something that pretty much only government will supply, and they are pretty few in number.

A textbook example is light from a street lamp, because the benefit one homeowner gets from that light doesn’t cause anyone else on the street any less benefit. Immunizing kids is often thought of as another public good. An economic case for subsidizing broadband isn’t even as strong as organized garbage collection, although the electric utility analogy comes into play here, too. Fast internet access isn’t a nice-to-have, advocates say, it’s a must-have like the electricity it takes to run a refrigerator or keep the lights on. Here the problem is not too many competitors going after the same lucrative customers, and eliminating the risk of competition by forming local monopolies. It’s having so few potential customers in sparsely populated areas that no company can justify the capital investment. I may have missed it when I went looking through the list of “market failures” published in my handy economics reference book, but it was hard to come up with one that seemed to apply here. It could be as simple as the local provider correctly assumed customers in a low-density area wouldn’t pay what it would really cost to bring broadband there.