We Can’t All Be in Google’s Kansas: A Plan for Winning the Bandwidth Race

[Commentary] Even though America is in a “global bandwidth race” and our “nation’s future economic security is tied to frictionless and speedy access to information,” according to Federal Communications Commission Chairman Julius Genachowski’s latest speech – we don’t have a plan for winning that race. And our current incumbent providers are not going to help.

They’re not going to be the ones rolling out the fiber-to-the-home networks that could provide this speedy access to information. Why? They have no incentive to do so. Because they never enter one another’s territories, they don’t face the competition that might spur such expansion. Instead, incumbent internet access providers such as Comcast and Time Warner (for wired access) and AT&T and Verizon (for complementary wireless access) are in “harvesting” mode. They’re raising average revenue per user through special pricing for planned “specialized services” and usage-based billing, which allows the incumbents to constrain demand. The ecosystem these companies have built is never under stress, because consumers do their best to avoid heavy charges for using more data than they’re supposed to. Where users have no expectation of abundance, there’s no need to build fiber on the wired side of the business or build small cells fed by fiber on the wireless side.

If we wanted ultra-high-speed connectivity in the U.S., we could:

• Provide loan guarantees for building basic competitive fiber infrastructure;
• Preempt state laws that make it difficult (or impossible) for municipalities to commission their own fiber networks;
• Require wholesale providers to build open, non-discriminatory networks as a condition of getting access to rights-of-way; and
• Require separation between content and transport providers to avoid the risk of harvesting.