Towards Effective U.S. Broadband Policies

Abstract

Although recent international broadband penetration rankings have Congress concerned about U.S. broadband policy, these statistics should not play a large role in forming U.S. broadband policy, as they fail to take into account geographic factors, demographic factors and consumer preferences that affect supply and demand. Also, some studies fail to consider new platforms, such as mobile wireless broadband. There are however many signs presently that the U.S. broadband market is showing healthy growth, with new broadband access platforms continuing to emerge. But implementing policies such as forced network sharing or unbundling would be harmful, and in practice will reduce incentives to enter the market and invest in infrastructure as a result of the reduced return on investment. If policymakers want to implement policies to encourage further broadband penetration, they should instead remove current barriers to entry and impediments to investment. Specifically, continued franchise law reform for television providers would decrease barriers to entry for those wanting to offer programming over broadband networks and, as a result, increase demand for broadband service. In addition, inefficiently used spectrum can also be reallocated in order to spur broadband investment. In light of the lack of evidence of failure in the broadband market, policymakers must take care to ensure that they do not create the very problems that they want to solve.