Incumbents Blocking Broadband Stimulus Efforts Because They Don't Like Competition

from the leave-us-alone dept

Back when the $7.2 billion broadband stimulus plan was announced, we were a bit worried that it was really just a bailout plan for incumbent broadband providers. The focus of the plan was on "shovel ready" projects in an attempt to create jobs, and that generally meant incumbent providers who could hire a lot of people. The last thing the government wanted to do in the middle of a recession was help fund an innovative startup that would disrupt a big employer. But there was one interesting aspect of the stimulus package: it suggested that anyone taking the government money would have to share access to infrastructure -- something that makes a lot of sense, if you're encouraging competition.

But, of course, the incumbents don't want competition at all. They've based their entire business models on the very lack of competition in the marketplace. So, it quickly became clear that they would not only resist taking any of the money, but they would actively seek to block upstarts from taking it as well. And... that's exactly what appears to be happening. lavi d points us to the news that lots of smaller companies are applying for the federal funds, and (surprise, surprise) the incumbents are not applying for the funds at all, but are drafting legislation in various local governments to prevent any upstart competitors from getting those funds. So, not only is it not stimulating the creation of jobs, it's not really providing much more broadband or competition.

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  1. identicon
    Carole, 15 Feb 2010 @ 12:41pm

    It worked in the 90s

    Competitve Telecom drove the economy to the highs we so badly miss back in the 90s.

    The problems were -
    Engineers who know how to build systems, but not run a business-

    The Big Boy club that was too hard headed to take advice

    The greedy who were only in to make a quick buck and exit

    Wall Street who crushes customer service and development budgets in favor of quick profits

    David vs Goliath legal departments

    Now, if we could solve all of those problems, it could be our ticket out of the mess we're in - just like it was the last time.

    Even if we can't solve those problems, it could give us a jump start that would last a few years at least before it fell apart.

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