April 12, 2021
The Biden Administration's $100 billion broadband plan marks the end of an era.
Since telecom reform began in the mid-80s with the breakup of the old AT&T it's been big telecom that has driven the industry, constrained by no more than light-touch regulation.
That's been the case not just in the US but across the OECD and much of the developing world.
The new Biden plan, hazy as it still is, drives the last nail in the coffin of the old regime.
Just as the deregulation era was driven by wider economic trends and new technology that rendered obsolete the "natural monopoly" concept, today's change is driven by an equally broad recognition that we need governments to do certain things, like manage health crises and ensure access to affordable broadband.
Everyone's a critic
There's been a predictable industry backlash, both on the idea of regulation in general and in particular from the hint that the government might intervene on pricing.
That's something a number of regulators already do, though you wouldn't know it from Michael Powell, former FCC chief and head of the cable lobby group NCTA, who is certain this will mean "a drawn-out government rate regulating process."
Nonetheless, he declared the industry had the same goal as the administration of "ensuring 100% of Americans have access to robust broadband networks."
To which the 30 million Americans who lack quality, affordable Internet might well ask: Why don't we?
As USA Today explains: "The problems with US broadband networks have been obvious for years. Service costs more than in many other rich nations, it still doesn't reach tens of millions of Americans and the companies that provide it don't face much competition."
It's not that US governments haven't tipped any funds into broadband, but it's been piecemeal and localized, mostly aimed at filling in the gaps in rural communications.
The recent Rural Digital Opportunity Fund auction, for example, will grant $9.2 billion to successful bidders over the next decade.
The new plan is national and holistic, with the aim of future-proofing the networks and bringing in municipal players.
It is a fundamental change from the last three decades.
Other major economies are already on this path.
The EU has allocated a fifth of its €672.5 billion (US$801 billion) COVID-19 reconstruction fund, Recovery and Resilience Facility, to digital connectivity and in particular to fiber and 5G.
By 2030, the European Commission aims to have all households covered by a gigabit network and all populated areas covered by 5G.
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In the last decade, Singapore and Australia have both rolled out government-funded next-gen broadband networks.
The Singapore project is an unqualified success – it ranks number one in world broadband rankings – and while the Australian scheme has been degraded by partisan politics no one questions its necessity.
Regulators in other successful Asian broadband markets such as Japan, Korea and Taiwan, have always been more hands-on.
Of course, setting out a plan is one thing. Filling in the detail is another.
There's a lot of opportunity for Biden and his team to get things wrong, but this is a landmark shift.
— Robert Clark, contributing editor, special to Light Reading
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