A regulated broadband monopoly is not what we need

There have been calls, one notably from Harvard Law Professor Susan P. Crawford, for a regulated broadband monopoly, the underlying premise that a regulated monopoly would further the goal of affordable universal access to broadband services.  Such a scheme, in my opinion, is not advisable and is merely a form of what I term as “net neutrality pile on.”

Regulation can provide incumbents with the benefit of keeping other competitors out by making the cost of compliance so onerous for market entrants that they change their minds about providing a community with competing services.  One small example would be RCN’s attempts to provide cable services in Fairfax County, Virginia.  Between franchise fees and requirements to build I-Nets, providing capacity on their cable network to deliver public, educational, and governmental programming (PEG), the requirements were enough to break the camel’s back already ladened with other issues of financing the deployment.  Broadband providers would face a similar regulatory moat.

Any benefits of regulatory protection incumbent broadband carriers would enjoy would be offset by the increased costs of compliance a regulated monopoly regime would call for.  As a former regulator I believe we spent more time engaging company staffs on the phone and in meetings than we did on the phone and on dates with our girlfriends and wives.  I have no doubt that proponents of a regulated broadband monopoly stand ready to put the Title II regime in the Telecommunications Act along with the Federal Communications Commission’s two-year old net neutrality rules to full use against a Comcast, AT&T, or Verizon and consumers would be the ones paying for the increase in regulatory scrutiny a regulated regime would bring about.

In addition, the regulated regime never incentivized quick deployment of new services.  bell operating companies would not have deployed in businesses and residences access to high-speed services were it not for the threat that cable companies were prepared to mount in the mid 1990s.  In theory and reality, monopolies promote stodgy unimaginative technology. 

Advocates for a regulated monopoly believe such a scheme is our future, but going back in time to the days of ISDN is not the move away from regulation intended by the Telecommunications Act of 1996.        

About Alton Drew

Alton Drew brings a straight forward and insightful brand of political market intelligence. Alton Drew graduated from the Florida State University with a Bachelor of Science in economics and political science (1984); a Master of Public Administration (1993); and a Juris Doctor (1999). You can also follow Alton Drew on Twitter @altondrew.
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