Iowa Goes For The Fiber — With Open Access For All

from the a-step-in-the-right-direction dept

There have been plenty of discussions lately about municipal broadband offerings, but they always seem to devolve into the standard debate: incumbents are afraid that they’ll be competing against tax-payer subsidized broadband vs. local governments (and residents) who are fed up with being ignored by broadband providers. Unfortunately, that simplifies the debate way too much. The real question is whether or not there’s some sort of market failure — and the lack of competition for broadband in many places suggests there is. There is a potential “middle ground” solution to all of this. If people believe that fiber-based internet access is a “natural monopoly,” like the highway system, why not treat it like the highway system? Let the government set it up, but then give equal access to everyone else to use it? In other words, don’t have the muni fiber competing with the traditional broadband providers, but working together to save them money. Some have been suggesting exactly this sort of solution for quite some time, and it’s worked in places like Vermont. It looks like Iowa is realizing the same thing as 80 communities across the state are teaming up to do exactly that. They’ll install fiber lines to the home, and then offer up those lines to outside broadband providers to offer service to residents. This cuts out the costs of maintaining their own network for the service providers, while guaranteeing more competition and higher levels of service for subscribers. The broadband providers, of course, won’t be happy because it removes their monopoly position, but what did they do to deserve the monopoly in the first place?

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Comments on “Iowa Goes For The Fiber — With Open Access For All”

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Anonymous Coward says:

No Subject Given

my town owns the cable infrastructure and leases it back to comcast. This might have been great for a while, but the equipment isn’t digital-capable, and the city doesn’t have the expertise to upgrade (but loves the revenue stream unadulterated, thank you very much).

The upside is that enough people can force a change here, put forward a referendum, etc. Fiber isn’t on the table, but probably should be.

Brian Yamabe (user link) says:

Re: The Highway System isn't a great model

Sure the highway system got the U.S. roads connected, but look at the fiascos of maintenance, new construction, local and state taxes targeted for construction siphoned off to support unrelated causes, and social engineering (remember how funds were withheld to states with drinking ages of 18).

To believe in “natural mononpolies” you have to have a very narrow view of the world and you can’t account for progress. The highway system is a natural monopoly if the way to get goods and services to various destinations is the automobile. The telephone system is a natural monopoly if the only way to communicate by voice is copper wire. FTTH is a natural monopoly if the only way to get broadband to the home is via fiber.

That is my problem with government intervention with regard to monopolies, natural or not. Regulation is put into place that entrenches their power. When time, progress, and the marketplace will handle them just fine.

Chris says:

Re: Re: The Highway System isn't a great model

I think the initial build-out of the highway system was great. What failed was just exactly what you pointed out, that the government didn’t know how to maintain after the fact. If there was a scenario in which the system was built by the government and then the service of it was contracted out to the lowest bidder, I guarantee that things would have been different. That model works really well. Use the government funds to build use private sector to maintain.

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