Wednesday, January 14, 2015

President Obama Wants More Government-Run Broadband Networks

On Tuesday evening, President Obama released a video on the White House Facebook page endorsing municipalities to provide broadband networks. On Wednesday afternoon, he will give a speech in Iowa outlining the contents of the latest report from the Executive Office of the President entitled “Community-Based Broadband Solutions: The Benefits of Competition and Choice for Community Development and Highspeed Internet Access.”
As FSF Scholars discussed in their comments to the FCC back in August, the FCC lacks the legal authority to preempt state laws restricting municipal broadband networks. These comments and additional FSF blogs (here and here) have outlined why municipal broadband inherently creates an anticompetitive market, because municipalities do not operate through profit and loss, placing large burdens onto taxpayers.
Additionally, a former classmate of mine at George Mason University, Brian Deignan, recently wrote a paper entitled “Community Broadband, Community Benefits? An Economic Analysis of Local Government Broadband Initiatives,” which was also blogged about at Tech Liberation Front. In his paper, he empirically found that municipal broadband networks have very modest positive effects on the economy, if any, while the growth in local government and burden on taxpayers are too large to ignore.
Increasing high-speed Internet access throughout the country is an admirable goal. But instead of the government providing access, the focus of the government should be to reduce regulatory barriers at all levels to pave the way for private providers to increase high-speed broadband access.