Telecom Regulation: Stuck in the 90's

Elon Musk recently blasted the federal government’s decision to deny a nearly billion-dollar subsidy for rural connectivity that had been previously awarded to his satellite broadband company, Starlink. No matter what you think about him, Musk’s outburst points to an uncomfortable reality: new technologies are rendering America’s policy for promoting and subsidizing broadband telecommunications outdated and counterproductive. Both 5G fixed-wireless and low-earth orbit (LEO) telecom satellite technologies are widening access to broadband, upending debates over whether the broadband market is sufficiently competitive. Most notably, LEO satellite broadband service is available pretty much everywhere, challenging the conventional wisdom that some geographic areas are inherently expensive to serve and eliminating the primary justification for nearly all government broadband infrastructure subsidies. These technological achievements represent a victory for champions of “facilities-based” competition — a market structure in which competition arises from providers each operating their own infrastructure. Yet rather than celebrating this milestone, Washington is not merely working to preserve the status quo, but expanding market interventions designed for the telecom industry of the 1990s. To ensure connectivity to all Americans while promoting innovation, it is time to truly reshape broadband policy.

[Scott Wallsten is a senior fellow at the Technology Policy Institute, as well as TPI’s president.]