Strange Bedfellows
Steve Goodman has been practicing telecommunications law since 1983, when he began working at the Federal Communications Commission. He now represents a wide variety of clients, including telecommunications equipment manufacturers, satellite service providers and international carriers.
With current proposals for the federal government to spend a hundred billion dollars subsidizing broadband deployment, a debate has broken out on whether to allow any of the funding to be spent on municipal broadband systems. To resolve that debate, I suggest looking to physics and economics. Let me start with the physics.
Physics incorporates a wave-particle duality for light. Light acts in some ways like a wave, and in other ways like a particle. In some aspects of telecom regulation, in contrast, there is a binary choice. For example, a service can either be a telecommunications service, or an information service, but it cannot be both.
I would suggest that we would be better served if Congress did not make the binary choice of categorically excluding municipal broadband from the proposed subsidy program. We need to make sure we have every tool in the toolbelt available to solve the digital divide.
Simply excluding municipal broadband from receiving the federal subsidies ignores important economic factors. On the one hand, municipal broadband systems can introduce distortions into the marketplace, because municipalities are not constrained by the need to make a profit, they do not pay taxes, and they control access to critical assets like rights of way that competitors to the municipal broadband service require.