California Proposes ëBroadband Bondsí

Government still tends to view the broadband usage problem in the U.S. as a paucity of infrastructure. The California Broadband Task Force (CBTF) blundered in the same policy direction in its recommendation last month that the state issue “broadband bonds” to fund infrastructure development in all parts of the state. Writing for the Pacific Research Institute, Daniel R. Ballon immediately found the flaw:

According to the CBTF’s final report, a full 96 percent of households have access to high-speed Internet services, but only 56 percent opt to subscribe. This gap indicates a lack of broadband demand, not a lack of infrastructure. This demand correlates strongly with household income. Instead of increasing the affordability of available commercial services, “broadband bonds” will displace existing services with inefficient government-run versions. This strategy would be akin to replacing grocery stores with a chain of state-run commissaries. Government bureaucrats cannot possibly micromanage a rapidly evolving technology such as high-speed Internet. Unlike roads and similar capital improvements, broadband networks require constant upgrades to serve the changing needs of consumers. In the past four years, Verizon has built more than 7,000 miles of high-speed capable infrastructure in California. How does this compare to the government’s record of upgrading transportation infrastructure? More than a decade after the legislature introduced plans for a high-speed train system connecting San Diego and Sacramento, lawmakers have yet to finalize the 700-mile route, much less begin the projected 15-20 year construction process. The CBTF’s plan dwarfs this train proposal.

While there are spots in California where wired broadband does not exist, Ballon goes on to raise questions as to whether attempting to run expensive fiber on the taxpayer’s dime is worth it when private investment is stepping up. Again, current policy’s overemphasis on infrastructure tends to view fiber as the sine qua non of broadband platforms, when in truth, you can meet consumer demand and bandwidth expectations with alternatives. Technically, universal access exists in the U.S. Satellite service is available everywhere. Admittedly, it’s clunky, but terrestrial-based wireless alternatives are on the rise, that may not deliver 100 Mb/s, stand to deliver 30 to 40 Mb/s. And for the record, few U.S. households are using 100 Mb/s of bandwidth right now, even if they are among the 2 million that the Fiber-to-the-Home Council estimates are connected directly by fiber. This may be heresy, but there is no “right” to fiber. Living in rural areas has trade-offs. Fresh air, cheap real estate and elbow room are great and I bet you can still get a good cup of coffee in town, it just may not be Starbucks or Seattle’s Best (and some think that’s a good idea). Companies like Zayo Bandwidth and Bend Broadband are showing that commercial carriers can reach rural customers. California should let them and others go for it rather than funnel subsidies to technologies that are costly and inefficient for the purpose.