Broadband Buildout: Public or Private?


Australia has an intriguing plan to build a state-of-the-art broadband fiber network covering most of the nation. A public-private investment of $33 billion over eight years would reach 90% of homes and businesses, with wireless and satellite technology used to access the remaining 10%.

A senior adviser to President Obama is reportedly a big fan of the idea. Susan Crawford, a member of the National Economic Council, noted in a recent policy forum that Singapore is making a similar investment and that plans are being considered in Britain and the Netherlands.

The Federal Communications Commission is to present a national broadband strategy to Congress by early next year. A public network in the U.S. would equal the $33 billion in Australia — and an estimated $400 billion more.

Benefits: increased access and lower monthly rates. Pitfalls: another huge tax increase to pay for the project and a potential decline in private sector investment — decreasing competition in the long run.

In local communities, there are a few stories of public ownership success, but more examples of failures. Increasing access is critical, but at what cost? With government already on a spending spree, a better alternative would seem to be to make it easier for enhanced private sector investment.

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