May 11, 2020 by Tom Cohen

Is Broadband Essential? Should It Be Treated as a Utility?

 

Where would “stay-at-home” America be without reliable, high-performance broadband connectivity?  No doubt prior to the COVID-19 pandemic, Americans relied on broadband every evening and weekend, largely to connect to video content. But, now, we need it to engage in telework, telehealth, distance learning, and just to connect to our families and community. So, is broadband essential? Yes. 

But just because broadband is essential, does not mean it should be treated as a utility and subject to far-reaching regulation. Let me explain the difference. Over the past two decades, the private sector, with light touch regulation, has invested over $500B building fixed broadband networks that reach approximately 90 percent of US households and provide service of at least 25 Mbps—and, more than 200 million people have access to 250 Mbps service. Further, most households have a choice among fixed providers, even at speeds greater than 100 Mbps, and rates on a per meg basis have dropped dramatically. As for the remaining 10 percent, both the private sector and the government are working to fill in these gaps in fixed broadband supply—and in fixed broadband adoption as well.

So, we are approaching universal fixed broadband service and we have accomplished that without utility regulation. Just because broadband has become essential provides no justification to change that model. Unlike with water, gas, and electric utilities, there are multiple providers of fixed broadband in most communities. Moreover, mobile broadband is moving to provide fixed 5G capabilities. And, further significant new entry by other wireless and even satellite providers, while not a certainty, cannot be ruled out. In such an environment, there is no problem with monopoly-like supply constraints or excessive prices. As such, imposing heavy-handed rate and other types of utility regulation on broadband providers is counter-productive, reducing the investment that will drive greater deployment. Rather, government’s role should be twofold: connecting locations in remote areas and providing support to get low-income and other disadvantaged people connected.

For more educational opportunities on funding and regulatory topics, please visit the Calix Regulatory webpage