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State-subsidized broadband a bad idea – Pacific Research Institute

State-subsidized broadband a bad idea

There are some in government intent on improving what already works just fine, often to the detriment of nearly everyone. The latest unnecessary fix of what’s not broken is a preposterous, counter-productive, exorbitantly expensive proposal to use state-issued bonds to bring ultra-fast Internet connections to every remote California nook and cranny.

The California Broadband Task Force convened in 2006 by Gov. Arnold Schwarzenegger has proposed the state intervene to provide “universal access and increased use” of broadband, the fast Internet access capability, for “all Californians.”

The scheme is preposterous because already without government involvement, the private sector has made broadband Internet access available to 96 percent of Californians. The absurdity of government rushing to the rescue is underscored by the fact that barely half of those for whom broadband already is available choose to buy it.

The proposal is counter-productive because it’s the flexible, responsive nature of the private sector that has quickly adapted to market demands, resulting in the spread of broadband access while keeping prices competitive. There’s no surer way to inhibit a fast-developing technology and to make it more costly than to put government in control.

The recommendation is exorbitantly expensive because it would force the public to underwrite extension of broadband services into the most far-flung, sparsely populated areas of the state, where the cost-per-person of providing the service would be disproportionately high and the cost of development would run eight to 10 times the cost to serve more developed areas.

These negatives apparently didn’t dissuade the task force, which urged the state to subsidize ultra-fast broadband service for “towns like Caribou (population 0), Bucks Lake (17) and Pearsonville, with 27 residents,” Daniel R. Ballon, a Ph.D. with the Pacific Research Institute, writes in an op-ed on this page. “On average, the 2,000 unserved communities cited by the task force have fewer than 250 households apiece.”

The Internet was adopted quickly in America, but even its rapid acceptance pales by comparison with the blazing-fast and wide acceptance of broadband Internet access. Almost every Californian already has a wide array of options including DSL, fiber optic, cable, satellite and mobile broadband services. We recommend Sacramento reject the task force’s recommendation, and leave it to the private sector to respond to public demand, to innovate and to reduce costs for broadband access.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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