It's time for the Feds to subsidize broadband

By Preston Gralla on Mon, 10/09/2006 - 12:41pm


The U.S. is falling so far behind the rest of the world in broadband that it's time for the government to take some action -- and Senator Hillary Clinton's proposed Rural Broadband Innovation Fund is a good first step.

Now, I know there are a lot of wingnuts out there who believe that Senator Clinton is the spawn of the devil, but whatever you think of Clinton, her idea is on-target. The U.S. lags behind the rest of the industrialized world in broadband deployment -- coming in at a lousy 16th worldwide -- and one part of the reason is that if you're in a rural area, you simply can't get a broadband connection. Only 17 percent of rural households have access to broadband, studies have shown.

This has implications not only for those who can't get broadband, but for the rest of us as well. There's a multiplier effect at work in broadband access; the greater the number of people who have it, the better off the general economy will be.

Even the Telecommunications Industry Association (TIA), no great fan of government action, recognizes that lack of broadband access is hurting the country.

“America has fallen behind in broadband penetration, reducing our relative efficiency in a number of ways,” TIA President Matthew J. Flanigan noted in a recent press release touting the fact that one million homes and businesses now subscribe to fiber to the home (FTTH) services.

You can be sure that those homes are not in rural areas. Telcom companies target only high-income suburbs for their FTTH deployments, and ignore both cities and rural areas alike. That's why the government needs to step in.

Clinton's bill would set up the Office of Rural Broadband Initiatives at the Department of Agriculture. The office would administer grants and loan programs to encourage investment in broadband infrastructure in underserved rural areas. It would also create a Rural Broadband Innovation Fund which would invest in services hat can deliver broadband service to rural areas including satellite, fiber, WiFi, and broadband over power lines (BPL).

There are some things the government can do well, and others it can't. This is an instance in which it can do a great deal of good, with seed money, investment, and encouragement.

After all, the Internet began its life as a government project as well, and that investment paid off pretty well.