Washington Times

Originally published , March 31, 2010

MOYLAN: Spare us the broadband plan

Andrew Moylan

As a little-noticed part of last year’s economic “stimulus” legisla-tion, Congress mandated that the Federal Communications Commission (FCC) create a National Broadband Plan. Launched amidst last week’s health care hysteria at the FCC’s broadband.gov Web site, the plan is the handiwork of Commission Chairman Julius Genachowski, an old college buddy of President Obama’s.

Given the penchant of the Obama administration and its allies in Congress for expanding the federal government, it should surprise no one that the broadband plan calls for more money, regulation and direction from Washington. But is the underlying premise of such a drastic, rigid scheme – that consumers must be rescued from a failing market – a sound one? The short answer is no. According to the FCC’s own 5,000-person survey, 200 million Americans have land-line broadband service. Barely more than a decade ago, that number was just 8 million. But the fact that two of every three Americans have adopted broadband technology only tells part of the story; an equally important indicator is broadband availability.

Here, the results of the FCC survey are even more eye-opening. Whether or not they actually subscribe to a service, 95 percent of people have land-line broadband service available to them, and 98 percent have access to 3G wireless broadband service through mobile-phone networks. This incredible proliferation happened at a time when an unassuming American public went about its business without a centralized plan from its federal government. So why the need for a massive National Broadband Plan to bring high-speed Internet service to the remaining 2 percent of Americans?

Even the hardest-to-serve Americans who live in remote areas can choose from several satellite providers that offer speeds of 1 megabit per second (18 times faster than dial-up) for $60 to $70 per month. That’s not as fast as cable or telephone companies’ broadband speeds, but it would seem to make more sense than spending $24 billion to build 4-megabit-per-second land lines out to those remote areas, as the FCC estimates it would cost.

Economist Jerry Ellig of the Mercatus Center at George Mason University points out just how costly it will be to do things the FCC’s way: “That $24 billion ‘funding gap’ also deserves comment. That’s the amount of subsidy the plan estimates will be required to make 4 Mbps broadband available to all Americans.If you read the plan carefully, you will also find that a whopping $14 billion of that is required to bring broadband to the highest-cost two-tenths of one percent of American housing units – 250,000 homes (see page 138 of the National Broadband Plan). That works out to $56,000 per housing unit!” Incredibly, $56,000 would be enough to buy satellite Internet service for each of those households over the next 66 years. Simply stated, it does not make sense to reprimand the 99.98 percent of Americans who choose to live in denser areas by forcing them to provide subsidies worth tens of thousands of dollars for the very few who reside in rural areas.

Mr. Obama’s appointees to this FCC have made no secret of their desire to exercise more control over the whole landscape of video, telephone and wireless services. One of the most worrisome elements of their agenda is their current rule-making process, better known as “Net neutrality,” which seeks to regulate the flow of Internet content for the first time ever. Another, made ominously clear in the National Broadband Plan, is the prospect of levying sweeping taxes on Internet service – something Congress has largely (and wisely) prohibited states and localities from doing since 1998.

The free market – in the form of private wireless, satellite, telephone and cable companies – has succeeded in spreading high-speed Internet access to nearly every American. All this happened without government micromanagement, subsidies or predatory taxes, and there’s no justification for imposing such burdens now. Some things simply don’t need .gov domain names, and broadband is one of them.

Andrew Moylan is director of government affairs for the National Taxpayers Union.