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Monday, April 13, 2009

Defining a Problem in order to Dictate the Terms of Victory
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The FCC released last week a Notice of Inquiry regarding the drafting of a "national broadband plan." Apparently, the theory is that the market is not doing an adequate job of providing broadband access to those who desire it. Indeed, if you take the NOI at face value, only when "every American citizen and every American business has access to robust broadband services" will the Commission be satisfied.

It is, of course, a transparently nonsensical goal. Is there any service to which every American citizen and every American business has uniform access? There is great wailing and gnashing of teeth in Washington, for example, over the digital broadcast television transition because millions of Americans, we are told, do not have access to multichannel TV services such as cable or DBS - both of which have been in the market for twice the time that broadband services have. There are countless other services, beyond media and communications services, that are less available in some areas than in others.

Indeed, people sometimes relocate to remote communities precisely to escape the "services" that do at least as much to clutter modern life and distract us from deep thought as they do to facilitate commerce. The echo of the Fallen Man's lament in Paradise Lost of "Oh, might I here live savage" becomes more profound as we grow more distant from our pristine innocence and natural perfection.

The question should never be whether any service is equally available to all. That is not only an impractical goal, but one that is counterproductive and inconsistent with a free society. The great genius of the market is that it drives services where they are most highly desired. By all fair metrics, the broadband market has accomplished this feat quite effectively. As Commissioner McDowell points out in his statement on the NOI, broadband infrastructure and services have expanded rapidly since the government stopped dictating how service providers can use their networks. This year alone, private companies, responding to market demand, will invest more than $80 billion in broadband infrastructure.

Simply put, there is no market failure here warranting government intervention. This is, of course, why the NOI has to define the "problem" to be addressed so broadly. Only by casting the goal in Hoover-like terms - broadband in every pot and a computer in every garage - can the FCC begin to justify government intrusion in this otherwise well-functioning market. And because the goal has been defined in metaphysically unattainable terms, the FCC has set the stage for government micromanagement of the broadband market for the foreseeable future.

Great danger lies on this path. The broadband markets are an economic success story. Even in a slow economy, private investment in broadband services continues. Increased government meddling in this market can be expected to discourage investment and delay innovation. Rather than ask how broadband services may be brought to every home in America, the FCC's NOI should be asking whether private markets or government processes are more efficient in delivering services to American consumers. No government agency, though, can abide an honest answer to that question.

posted by W. Kenneth Ferree @ 1:16 PM | Broadband , Communications

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