This week I want to circle back to what I think is a much bigger problem with Broadband in the U.S. than Net Neutrality. That is the availability, quality and cost of Broadband Access.
To me this is the first thing we need to solve in our Internet Service issues and I see our whole focus on Net Neutrality as getting in the way of this. Why? I think our regulators only have so much energy and that they will spend time now on defending Net Neutrality. There are suits that have already been filed and there will likely be more. I am not going to spend any time on those issues at the moment, because I want to call attention to this other issue.
I see regularly that many folks would like there to be “more competition” for ISP services. The problem is that to build a new network requires a very large amount of capital and an extended period of time. Google has built out a handful of cities and subscriber counts are not very well known. I know a lot about Verizon’s FiOS roll-out and that was an overbuild of their existing network. The bulk of that build took over 5 years and that was not over their entire network. Before the latest Frontier purchase of lines only about 1/2 of Verizon lines could get FiOS. Investors hammered Verizon for building FiOS as it was considered a waste of money.
And that leads us to our problem. How do we get more or better investment in building our High Speed pipes to residential customers? I think the only ways to get there are through either creating Broadband as a Universal Service or through Structural Separation. I will talk about both, but I think that until Net Neutrality dies down a bit we will see neither.
Universal Service should be a familiar concept. Today, it exists for Plain Old Telephone Services (POTS). Your local phone company is required to bring a phone to your home. It does not matter how costly it is. It is the law. We could create the same thing for Broadband. The large ISPs would scream bloody murder as they would be required to make sure that this service was available everywhere. There will likely be some subsidy by the US Government to help offset the costs. This might be in low cost loans or grants to help pay for the build-out.
The other mechanism is very unlikely to happen but would separate your physical access from your Internet Service. This is true for some smaller ISPs today. In general, they have to lease access to your home from the local phone company. But there is no reason that this could not be separated for both cable and telco. I actually prefer this solution as I think a number of Entrepreneurs would come up with interesting Internet Service packages. Now the Government would regulate the capability of the pipe coming into your residence, like they do with Electrical service.
Why do I think those choices are where we need to go? The problem is that the Service Providers need a reason to invest. They have so many places to invest, those unserved and underserved areas just never reach the level of getting attention. Government money comes with too many strings for the large providers. So, realistically the only way to get it done is through coercion.
Have a great weekend!
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