Opinion

Government broadband overbuilds are anti-competitive

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Scott Cleland
Chairman, NetCompetition
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      Scott Cleland

      Scott Cleland is Chairman of NetCompetition® a pro-competition e-forum supported by broadband interests and President of Precursor LLC, a research consultancy for Fortune 500 companies. He is author of the book: Search & Destroy Why You Can’t Trust Google Inc.

Governments do not “compete” with companies.

Governments tax, limit, police and judge companies.

So when governments try and offer a similar service that private companies have long provided consumers, these governments effectively are opposing and undermining private companies in the marketplace – not “competing” with them.

That’s why some municipalities, which are overbuilding existing wire-line and wireless broadband companies’ services, are acting anti-competitively – not pro-competitively as they try to claim.

So what’s going on here? It’s simply politics.

At the local level, activists of common carrier net neutrality have long pushed municipalities to offer broadband as a government-owned utility service.

It is a key element of a broader political grassroots movement that seeks a government mandate that the Internet be a public information commons – not an e-marketplace.

These utopian activists oppose the “economics of scarcity,” i.e. free market competition and private property of Internet infrastructure or content.

They imagine a new virtual society based on the “economics of abundance,” i.e. no cost use of the Internet because the government owns or subsidizes the cost of broadband infrastructure, and common carrier regulates a zero-price for downstream traffic.

Since these activists politically oppose unregulated broadband competition, it is no surprise that they claim there is insufficient broadband competition to serve or protect consumer interests. Conveniently, they ignore that America enjoys the most facilities-based broadband competition in the world.

Tellingly, this utopian movement’s municipal broadband record to date has been one of mostly waste and failure.

At the federal level, these activists continue to pressure the FCC to force broadband to become a public utility by unilaterally “reclassifying” competitive broadband companies’ businesses from an unregulated Internet information service to a monopoly telephone service.

That would reverse a consistent forty-three years of FCC precedents to not apply monopoly telephone price regulations on the competitive computer data services market to promote innovation.