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What Should Be Government's Role in Broadband Expansion?

The broadband rollout in the United States has been a tremendous success, demonstrating the ability of private entities to build critical infrastructure through the free market, using private risk capital and self-organization—all the stuff we love here at the Institute for Policy Innovation.

The alternative would have been a government-driven model where governments would build, own, operate and maintain the broadband infrastructure using taxpayer dollars through the well-known efficiencies of government bureaucracy (/sarcasm/).

What? You don’t want the people who run the post office and the Department of Motor Vehicles to also be in charge of the internet? Neither do we.

Today, because of this successful and mostly private-sector effort, over 96 percent of American households have broadband availability, which is an amazing figure given America’s vast rural areas. Not every one of those households chooses to pay for broadband, but it is available at their address.

The remaining fraction are the hard cases, of course, for which there is a limited or nonexistent business case for the private sector to build out service.

Bridging the digital divide, which includes not only households with no access but also households that cannot afford broadband, has become an even higher policy priority because of what we learned during the Covid-19 pandemic. Forced to work from home, attend classes from home, shop and obtain necessary services from home, including health care, Americans without broadband were suddenly at a sharp disadvantage. And so both our federal and state governments have made extending broadband to all Americans a post-Covid priority.

But what’s the most efficient use of taxpayer dollars to reach this relatively narrow slice of the American public? And does it really require hundreds of billions of dollars? If the private sector hasn’t yet accomplished it, it seems some government involvement is necessary, but there are better ways that avoid the potential for market harm.

For instance, instead of the preferred options of carefully targeting taxpayer dollars at public-private partnerships or providing vouchers or credits for low-income families to pay for broadband, both federal and state plans include incentivizing:

  • Wasteful and unnecessary things like government-owned municipal networks, mandating specific technologies and broadband speeds instead of using the most appropriate technologies for the specific situation, and

  • Encouraging the overbuilding of existing broadband networks with competing government subsidized networks, which would immediately devalue the state-of-the-art networks already in place.

That’s why, on July 21, the Institute for Policy Innovation is hosting a virtual policy briefing on the government’s role in broadband expansion, and we hope you will join us. We’ll have speakers from the think tank and corporate worlds, and former FCC Commissioner Michael O’Rielly.

Informing Americans about wasteful spending and keeping the government from competing with the private sector is one way we at IPI pursue our mission of promoting economic liberty and innovation. Please consider joining us in this important work, and please join us on July 21.