Lessons From The US's First Broadband Plan... In 1808
from the public-private-partnerships dept
Two hundred years ago, Gallatin's proposal was audacious. The young Republic, in danger of coming apart at the seams of its already-diverse geography, should commit to building a series of road and canals to knit the continent together from the Atlantic to the Mississippi. The Gallatin Plan called for canals that would connect the inland waterways of the U.S. from Massachusetts to North Carolina, a "great turnpike road from Maine to Georgia," and improvements, including what would one day become the Erie Canal, to connect the waterways of the Atlantic with the Great Lakes.If you compare that to some of the debates over broadband policy today, you'll note some similarities. Gallatin's plan never went through directly -- instead a semi-public-private partnership was worked out instead. Downes notes how common this is when it comes to US infrastructure projects throughout history, with the interstate highway system perhaps being the one exception.
The value of roads and canals in improving the communications, safety, and commerce of the young republic were too obvious to enumerate. Indeed, Gallatin wrote, "No other single operation, within the power of the government, can more effectually tend to strengthen and perpetuate that union, which secures external independence, domestic peace, and internal liberty."
Gallatin estimated his proposed new infrastructure would cost the federal government $20 million. In countries with a "compact population," he noted, such expenditures might be expected to come from “individual exertion, without any direct aid from the government.” But the vast geography of the United States, its sparse population, and the general poverty of many of its citizens, justified public investment. As the federal government was already in debt, Gallatin advised Congress to borrow the money from future budget surpluses in $2 million increments over a ten-year period. (The surpluses were expected to come from the sale of western lands.)
So what does all that mean? Well, the answer is tricky. Because you need some aspect of a public-private partnership to do these sorts of big infrastructure projects, but at the same time, the role of both parties becomes finely balanced. Everyone knows the larger parts: private companies provide much of the investment and the technology/manpower. The government provides the rights of way/land and potentially additional subsidies to encourage the investment. But then what? Left with too little oversight, the companies controlling the infrastructure can (and do) take advantage of their position, knowing that there's effectively limited competition to keep them in line. But, with too much oversight, things get ridiculous -- and often that oversight becomes subject to regulatory capture, where those same incumbents use the regulatory power to prop themselves up in the face of nascent competition. This was the issue with the railroads and the Interstate Commerce Commission (ICC) -- a topic that was covered in great detail in comparison with today's broadband discussions in Tim Lee's paper on net neutrality, and discussed again by Downes.
There isn't an easy answer to all of this, but what is clear is that there are important issues to be discussed. And the problem is that in the US we're not really discussing the right issues at all. Much of the focus is unfortunately on net neutrality instead of competition, and the broadband plan is more focused on adoption rates rather than actual broadband. This is a key point that gets a bit buried in Downes' piece. He talks about how the focus of the broadband plan is to increase broadband adoption in the US, but that broadband is already widely available in the US. It's just that there are lots of people who don't want it yet.
But both Downes and the FCC seem to skip over the larger issue of speed. The real problem in the US is not that we're so far behind on adoption rates -- but in what kind of broadband most people can use today. With some exceptions, it's slow. Especially compared to some other countries. And, yes, there are some issues involving population density and the ability to build out a faster network, but if the government is going to get involved, why not focus on the metric that matters: which would be the bandwidth of the network, rather than making sure that the guy living at the end of a dirt road in the middle of nowhere can get his broadband access.