Broadband Stimulations

February 2nd, 2009 by · Leave a Comment

I have been asked several times now for a comment on the broadband stimulus that is floating through Congress right now.  I must admit, I've been thinking about it and trying to write a post on the subject for a week.  Why so difficult?  Because I have very mixed feelings on the subject.  On the one hand I'd love to see more money spent in the sector, but I also don't generally trust the government to spend it well.  The debate everywhere is about how much is enough, but how can we answer that if nobody is clear on what we are really trying to accomplish?  There are various visions that the press blurs together into nice short sound bites, but they aren't always compatible.  So before I express my own opinions, here is a quick poll for Telecom Ramblings readers:

[poll id="14"]

It's not an idle question, all that squabbling in the media you are hearing comes down to this.  Well,  at least it does once you look beyond the nearly identical whines of "my slice of pie isn't big enough, it's not fair", but that's another story.

My own take?   It's a stimulus, stop pretending it's anything else - it's not a long term broadband welfare package and if it's just money it will not solve the problems that have made US broadband lag.  The primary beneficiary should be the ailing economy, so when we spend money we want to have maximum stimulating effect.  Most of the waiting rural expansion is uneconomical, but still close to the line - spending the money there allows you to bump more projects from the unjustified to the justified category.   On the other hand, the size of last mile pipes is not limited by capital for expansion, that's just not why we are falling behind.   So the money we commit to a stimulus should go to rural expansion, but far more importantly, vast amounts of political capital should go to fixing the regulatory infrastructure.

Money does help, telecom expansion requires capital and the banks aren't offering any right now, so yes it is needed.  However, no amount of money can substitute for good governance.  If one wants to solve the breadth and depth deficit in US broadband, one has to realize the root causes have nothing to do with lack of capital.  Until recently, money was easy and cheap and anyone could get it but still we fell behind steadily.  No, the reason the US has fallen behind lies with poor regulation and leadership.  So if you hand the sector money and do nothing else, you don't really accomplish that much.

So what to do?  Paul Kouroupas over on the Global Crossing blogs put forward an 8 item plan back in early January.  Only one had to do with money, and I think he has it absolutely correct.  As hard as it is, the way to true broadband stimulation doesn't come from money, it never has.   A clear, unambiguous, non-intrusive industry structure is the primary prerequisite.  So the next time the press says "Is This Enough?" just ignore them, the real answer is in the fine print they either don't understand or don't think their audience will.

For what it's worth, I think Obama and Genachowski do understand this, and the size of the initially proposed broadband package reflects that knowledge.   However, Congress is another matter, so I look forward to reading the details of the final plan.

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Categories: Government Regulations · Internet Backbones · Old · Polls

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