We occasionally look in on Seattle's broadband discussions because they are the largest city in the U.S. in which there is something approaching a serious discussion about a publicly owned community fiber network. They have a mayoral candidate who makes it a high priority and their Chief Technology Officer, Bill Schrier, both gets it and has an excellent staff that understands the benefits of such a network. Glenn Fleishman has just interviewed Bill Schrier about the network and subsequently discussed the public need for broadband in specific neighborhoods due to extreme market failure. I like Glenn's style - he asks difficult questions and pushes for real answers. That said, I still want to push back on one of his statements because I think it instructive:

Government is often criticized for eliminating competition, inefficiently providing private services, and removing the profit motive. However, market failures are often where governments are asked or begged to step in, and, when accomplished correctly, can provide new opportunities for private enterprise.

Glenn is absolutely right both in capturing some of the criticisms leveled at public networks as well as noting that publicly owned broadband tends to occur in the most difficult environments. Contrary to telco rhetoric, local government officials tend not to want to jump into telecommunications efforts unless they see it as vital for the community. They are busy enough and these networks take years of planning, public hearings, and lots of loud attacks from the very companies that refuse to build the needed networks. But look at the first two items that Glenn notes government is accused of: eliminating competition and inefficiently providing services. How is it that it can do both? Governments cannot coerce people into using the network and federal regulations prevent the local government from abusing its authority over the rights-of-way for the public network. Local governments can use untaxable bonds but private companies get depreciation, tax incentives, and can cross-subsidize from the nearby communities where they charge monopoly prices. As for removing the profit motive - this is hardly a criticism. Infrastructure should not be controlled by any entity with a profit motive - it is the foundation of all other markets.

We occasionally look in on Seattle's broadband discussions because they are the largest city in the U.S. in which there is something approaching a serious discussion about a publicly owned community fiber network. They have a mayoral candidate who makes it a high priority and their Chief Technology Officer, Bill Schrier, both gets it and has an excellent staff that understands the benefits of such a network. Glenn Fleishman has just interviewed Bill Schrier about the network and subsequently discussed the public need for broadband in specific neighborhoods due to extreme market failure. I like Glenn's style - he asks difficult questions and pushes for real answers. That said, I still want to push back on one of his statements because I think it instructive:

Government is often criticized for eliminating competition, inefficiently providing private services, and removing the profit motive. However, market failures are often where governments are asked or begged to step in, and, when accomplished correctly, can provide new opportunities for private enterprise.

Glenn is absolutely right both in capturing some of the criticisms leveled at public networks as well as noting that publicly owned broadband tends to occur in the most difficult environments. Contrary to telco rhetoric, local government officials tend not to want to jump into telecommunications efforts unless they see it as vital for the community. They are busy enough and these networks take years of planning, public hearings, and lots of loud attacks from the very companies that refuse to build the needed networks. But look at the first two items that Glenn notes government is accused of: eliminating competition and inefficiently providing services. How is it that it can do both? Governments cannot coerce people into using the network and federal regulations prevent the local government from abusing its authority over the rights-of-way for the public network. Local governments can use untaxable bonds but private companies get depreciation, tax incentives, and can cross-subsidize from the nearby communities where they charge monopoly prices. As for removing the profit motive - this is hardly a criticism. Infrastructure should not be controlled by any entity with a profit motive - it is the foundation of all other markets.

We occasionally look in on Seattle's broadband discussions because they are the largest city in the U.S. in which there is something approaching a serious discussion about a publicly owned community fiber network. They have a mayoral candidate who makes it a high priority and their Chief Technology Officer, Bill Schrier, both gets it and has an excellent staff that understands the benefits of such a network. Glenn Fleishman has just interviewed Bill Schrier about the network and subsequently discussed the public need for broadband in specific neighborhoods due to extreme market failure. I like Glenn's style - he asks difficult questions and pushes for real answers. That said, I still want to push back on one of his statements because I think it instructive:

Government is often criticized for eliminating competition, inefficiently providing private services, and removing the profit motive. However, market failures are often where governments are asked or begged to step in, and, when accomplished correctly, can provide new opportunities for private enterprise.

Glenn is absolutely right both in capturing some of the criticisms leveled at public networks as well as noting that publicly owned broadband tends to occur in the most difficult environments. Contrary to telco rhetoric, local government officials tend not to want to jump into telecommunications efforts unless they see it as vital for the community. They are busy enough and these networks take years of planning, public hearings, and lots of loud attacks from the very companies that refuse to build the needed networks. But look at the first two items that Glenn notes government is accused of: eliminating competition and inefficiently providing services. How is it that it can do both? Governments cannot coerce people into using the network and federal regulations prevent the local government from abusing its authority over the rights-of-way for the public network. Local governments can use untaxable bonds but private companies get depreciation, tax incentives, and can cross-subsidize from the nearby communities where they charge monopoly prices. As for removing the profit motive - this is hardly a criticism. Infrastructure should not be controlled by any entity with a profit motive - it is the foundation of all other markets.

We occasionally look in on Seattle's broadband discussions because they are the largest city in the U.S. in which there is something approaching a serious discussion about a publicly owned community fiber network. They have a mayoral candidate who makes it a high priority and their Chief Technology Officer, Bill Schrier, both gets it and has an excellent staff that understands the benefits of such a network. Glenn Fleishman has just interviewed Bill Schrier about the network and subsequently discussed the public need for broadband in specific neighborhoods due to extreme market failure. I like Glenn's style - he asks difficult questions and pushes for real answers. That said, I still want to push back on one of his statements because I think it instructive:

Government is often criticized for eliminating competition, inefficiently providing private services, and removing the profit motive. However, market failures are often where governments are asked or begged to step in, and, when accomplished correctly, can provide new opportunities for private enterprise.

Glenn is absolutely right both in capturing some of the criticisms leveled at public networks as well as noting that publicly owned broadband tends to occur in the most difficult environments. Contrary to telco rhetoric, local government officials tend not to want to jump into telecommunications efforts unless they see it as vital for the community. They are busy enough and these networks take years of planning, public hearings, and lots of loud attacks from the very companies that refuse to build the needed networks. But look at the first two items that Glenn notes government is accused of: eliminating competition and inefficiently providing services. How is it that it can do both? Governments cannot coerce people into using the network and federal regulations prevent the local government from abusing its authority over the rights-of-way for the public network. Local governments can use untaxable bonds but private companies get depreciation, tax incentives, and can cross-subsidize from the nearby communities where they charge monopoly prices. As for removing the profit motive - this is hardly a criticism. Infrastructure should not be controlled by any entity with a profit motive - it is the foundation of all other markets.

We finally have a realistic estimate of the cost of bringing 100Mbps to every home in America... and Light Reading labeled the cost "jaw-dropping."

Want to provide 100-Mbit/s broadband service to every U.S. household? No problem: Just be ready to write a $350 billion check. Federal Communications Commission (FCC) officials shared that jaw-dropping figure today during an update on their National Broadband Plan for bringing affordable, high-speed Internet access to all Americans. The Commission is schedule to present the plan to Congress in 141 days, on Feb. 17.

Don't get me wrong, I agree that $350 billion is a lot of money. On the other hand, we spent nearly $300 billion on surface transportation over 4 years from 2005-2009. $350 billion buys a fiber-optic network that will last considerably longer. Additionally, such a network will generate considerably more revenue than a highway. In fact, these networks will pay for themselves in most areas if they can access to low-interest loans. Consider the comments of Deputy Administrator Zufolo (of the Rural Utilities Service) from my recent panel at NATOA:

Zufolo explained the RUS decision to use its $2.5 billion in funds primarily to subsidize loans and not provide grants, as the agency's best opportunity to make the more efficient use of the federal money and have maximum impact. Because the default rate on RUS loans is less than 1% and the subsidy rate is also low, only about 7%, it costs the government only $72,000 to loan $1 million for rural network development, she said.

Let's say that RUS decides to embark on getting 100 Mbps to everyone in a rural area - some of the projects will be riskier than the standard portfolio, so let's assume it costs the federal government $100,000 to loan $1 million (makes it easier math too). In order to spur the $350 billion investment for these networks, the government would have to put up $35 billion.

We finally have a realistic estimate of the cost of bringing 100Mbps to every home in America... and Light Reading labeled the cost "jaw-dropping."

Want to provide 100-Mbit/s broadband service to every U.S. household? No problem: Just be ready to write a $350 billion check. Federal Communications Commission (FCC) officials shared that jaw-dropping figure today during an update on their National Broadband Plan for bringing affordable, high-speed Internet access to all Americans. The Commission is schedule to present the plan to Congress in 141 days, on Feb. 17.

Don't get me wrong, I agree that $350 billion is a lot of money. On the other hand, we spent nearly $300 billion on surface transportation over 4 years from 2005-2009. $350 billion buys a fiber-optic network that will last considerably longer. Additionally, such a network will generate considerably more revenue than a highway. In fact, these networks will pay for themselves in most areas if they can access to low-interest loans. Consider the comments of Deputy Administrator Zufolo (of the Rural Utilities Service) from my recent panel at NATOA:

Zufolo explained the RUS decision to use its $2.5 billion in funds primarily to subsidize loans and not provide grants, as the agency's best opportunity to make the more efficient use of the federal money and have maximum impact. Because the default rate on RUS loans is less than 1% and the subsidy rate is also low, only about 7%, it costs the government only $72,000 to loan $1 million for rural network development, she said.

Let's say that RUS decides to embark on getting 100 Mbps to everyone in a rural area - some of the projects will be riskier than the standard portfolio, so let's assume it costs the federal government $100,000 to loan $1 million (makes it easier math too). In order to spur the $350 billion investment for these networks, the government would have to put up $35 billion.

We finally have a realistic estimate of the cost of bringing 100Mbps to every home in America... and Light Reading labeled the cost "jaw-dropping."

Want to provide 100-Mbit/s broadband service to every U.S. household? No problem: Just be ready to write a $350 billion check. Federal Communications Commission (FCC) officials shared that jaw-dropping figure today during an update on their National Broadband Plan for bringing affordable, high-speed Internet access to all Americans. The Commission is schedule to present the plan to Congress in 141 days, on Feb. 17.

Don't get me wrong, I agree that $350 billion is a lot of money. On the other hand, we spent nearly $300 billion on surface transportation over 4 years from 2005-2009. $350 billion buys a fiber-optic network that will last considerably longer. Additionally, such a network will generate considerably more revenue than a highway. In fact, these networks will pay for themselves in most areas if they can access to low-interest loans. Consider the comments of Deputy Administrator Zufolo (of the Rural Utilities Service) from my recent panel at NATOA:

Zufolo explained the RUS decision to use its $2.5 billion in funds primarily to subsidize loans and not provide grants, as the agency's best opportunity to make the more efficient use of the federal money and have maximum impact. Because the default rate on RUS loans is less than 1% and the subsidy rate is also low, only about 7%, it costs the government only $72,000 to loan $1 million for rural network development, she said.

Let's say that RUS decides to embark on getting 100 Mbps to everyone in a rural area - some of the projects will be riskier than the standard portfolio, so let's assume it costs the federal government $100,000 to loan $1 million (makes it easier math too). In order to spur the $350 billion investment for these networks, the government would have to put up $35 billion.

We finally have a realistic estimate of the cost of bringing 100Mbps to every home in America... and Light Reading labeled the cost "jaw-dropping."

Want to provide 100-Mbit/s broadband service to every U.S. household? No problem: Just be ready to write a $350 billion check. Federal Communications Commission (FCC) officials shared that jaw-dropping figure today during an update on their National Broadband Plan for bringing affordable, high-speed Internet access to all Americans. The Commission is schedule to present the plan to Congress in 141 days, on Feb. 17.

Don't get me wrong, I agree that $350 billion is a lot of money. On the other hand, we spent nearly $300 billion on surface transportation over 4 years from 2005-2009. $350 billion buys a fiber-optic network that will last considerably longer. Additionally, such a network will generate considerably more revenue than a highway. In fact, these networks will pay for themselves in most areas if they can access to low-interest loans. Consider the comments of Deputy Administrator Zufolo (of the Rural Utilities Service) from my recent panel at NATOA:

Zufolo explained the RUS decision to use its $2.5 billion in funds primarily to subsidize loans and not provide grants, as the agency's best opportunity to make the more efficient use of the federal money and have maximum impact. Because the default rate on RUS loans is less than 1% and the subsidy rate is also low, only about 7%, it costs the government only $72,000 to loan $1 million for rural network development, she said.

Let's say that RUS decides to embark on getting 100 Mbps to everyone in a rural area - some of the projects will be riskier than the standard portfolio, so let's assume it costs the federal government $100,000 to loan $1 million (makes it easier math too). In order to spur the $350 billion investment for these networks, the government would have to put up $35 billion.

We finally have a realistic estimate of the cost of bringing 100Mbps to every home in America... and Light Reading labeled the cost "jaw-dropping."

Want to provide 100-Mbit/s broadband service to every U.S. household? No problem: Just be ready to write a $350 billion check. Federal Communications Commission (FCC) officials shared that jaw-dropping figure today during an update on their National Broadband Plan for bringing affordable, high-speed Internet access to all Americans. The Commission is schedule to present the plan to Congress in 141 days, on Feb. 17.

Don't get me wrong, I agree that $350 billion is a lot of money. On the other hand, we spent nearly $300 billion on surface transportation over 4 years from 2005-2009. $350 billion buys a fiber-optic network that will last considerably longer. Additionally, such a network will generate considerably more revenue than a highway. In fact, these networks will pay for themselves in most areas if they can access to low-interest loans. Consider the comments of Deputy Administrator Zufolo (of the Rural Utilities Service) from my recent panel at NATOA:

Zufolo explained the RUS decision to use its $2.5 billion in funds primarily to subsidize loans and not provide grants, as the agency's best opportunity to make the more efficient use of the federal money and have maximum impact. Because the default rate on RUS loans is less than 1% and the subsidy rate is also low, only about 7%, it costs the government only $72,000 to loan $1 million for rural network development, she said.

Let's say that RUS decides to embark on getting 100 Mbps to everyone in a rural area - some of the projects will be riskier than the standard portfolio, so let's assume it costs the federal government $100,000 to loan $1 million (makes it easier math too). In order to spur the $350 billion investment for these networks, the government would have to put up $35 billion.

We finally have a realistic estimate of the cost of bringing 100Mbps to every home in America... and Light Reading labeled the cost "jaw-dropping."

Want to provide 100-Mbit/s broadband service to every U.S. household? No problem: Just be ready to write a $350 billion check. Federal Communications Commission (FCC) officials shared that jaw-dropping figure today during an update on their National Broadband Plan for bringing affordable, high-speed Internet access to all Americans. The Commission is schedule to present the plan to Congress in 141 days, on Feb. 17.

Don't get me wrong, I agree that $350 billion is a lot of money. On the other hand, we spent nearly $300 billion on surface transportation over 4 years from 2005-2009. $350 billion buys a fiber-optic network that will last considerably longer. Additionally, such a network will generate considerably more revenue than a highway. In fact, these networks will pay for themselves in most areas if they can access to low-interest loans. Consider the comments of Deputy Administrator Zufolo (of the Rural Utilities Service) from my recent panel at NATOA:

Zufolo explained the RUS decision to use its $2.5 billion in funds primarily to subsidize loans and not provide grants, as the agency's best opportunity to make the more efficient use of the federal money and have maximum impact. Because the default rate on RUS loans is less than 1% and the subsidy rate is also low, only about 7%, it costs the government only $72,000 to loan $1 million for rural network development, she said.

Let's say that RUS decides to embark on getting 100 Mbps to everyone in a rural area - some of the projects will be riskier than the standard portfolio, so let's assume it costs the federal government $100,000 to loan $1 million (makes it easier math too). In order to spur the $350 billion investment for these networks, the government would have to put up $35 billion.