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Getting in the Broadband Zone

Back in 2009, in response to the Federal Communications Commission’s request for input for the formulation of its National Broadband Plan, IPI submitted comments intended to push back against a number of bad ideas we anticipated from the FCC under President Obama.

But we also introduced what we thought was a great, market-oriented way for the government to encourage broadband rollout to unserved areas, which we called Broadband Enterprise Zones. If the federal government decided that encouraging broadband deployment was a policy priority, there was a way to do it that preserved market forces and didn’t involve enormous new federal spending and regulation.

In our concept, based on FCC mapping of unserved areas, those areas would be designated Broadband Enterprise Zones. Within such zones, federal tax credits would be offered to internet service providers (ISPs) that built out broadband networks.

In addition, regulation would be minimal within the zones in order to hasten the rollout of broadband, including preemption of unreasonable local deployment barriers. Local regulations would be subject to a “shot clock” so that interminable delays were eliminated. The zones would be neutral as to which technologies were deployed, so there would be no tech mandates or FCC definitions that would serve to discourage deployment or tilt the playing field. States and localities would be challenged to match these policies so that state taxes and regulations didn’t undermine the goals of the Broadband Enterprise Zones.

Of course, the FCC ignored the idea, since at the time the chairman was all about federal mandates, regulations, and spending taxpayer dollars. The track record of those policies in encouraging deployment to unserved areas has been dismal.

Fast-forward seven years, and last September FCC Commissioner Ajit Pai proposed what he called Gigabit Opportunity Zones. We had some fun with Commissioner Pai about “reviving our proposal,” though in fact Pai’s proposal was more detailed and more targeted. Pai would target lower-income areas, and would provide some federal subsidies, for which we are generally less than enthusiastic.

And now FCC Commissioner Pai has become Chairman Pai, so we’re excited that some sort of enterprise zone approach to broadband deployment could become a reality. In our view, an incentive-based approach is far superior to doling out massive federal grants and encouraging local governments to get into the business of running broadband networks.

IPI looks forward to working with Chairman Pai to find market-based solutions to encourage broadband deployment in the relatively few remaining unserved areas of the country. Market incentives and technological innovation, rather than top-down government management, is the way to proceed.