October 12, 2012
On Wednesday at the Brookings Institution event “Fostering Internet Competition” in DC, my friend and Harvard Professor Susan Crawford suggested that we look at the spread of electricity throughout rural America to guide a path for the deployment of broadband. While this feel-good analogy stirs American pride in the ingenuity that colors our nation’s history, it doesn’t hold water.
Electricity shocked the world in 1882, when Edison’s Pearl Street Power Station started up its generator in New York City. Within just a few years, Americans living in big cities would be able to choose from among 20 to 30 different providers, such as the Edison Electric Illuminating Company of New York. But most Americans weren’t able to take advantage of electricity until half a century later, because there wasn’t a strong enough business-case for electricity providers to serve every town on the Oregon Trail. It was the Rural Electrification Act of 1936 that said “let there be light” (for all), providing federal loans for the installation of electrical distribution systems to serve rural areas of the United States.
Over 75 years later, this commodity hasn’t changed all that much. The same type of electricity that powered the lamps of the 19th Century powers the light, appliances and devices of today. The Internet on the other hand is anything but static. It’s a rapidly-changing technology that has evolved many times in the past two decades alone, since the first commercial traffic crossed it in 1992. Thanks to a vibrant, competitive industry, relentless innovation and a rapacious consumer appetite, we’re seeing new “flavors” of broadband every year, including DSL, fiber-to-the-home, fixed wireless broadband, 3G, mobile LTE, and so on.
Much has changed since the government financed the spread of electricity across our nation. Unlike when taxpayers financed electrification, broadband is already widely available — more than 90% of consumers can choose among five or more providers, according to Federal Communication Commission data. Also unlike 1936, our national debt now exceeds $16,000,000,000,000, putting far greater pressure on how we spend our critical infrastructure dollars, especially as the FCC acknowledges that the cost of universal high-speed networks could reach $350 billion. Most importantly, we have private sector competitors eager to make those investments, to install, upgrade and maintain the broadband networks that make our economy so much more competitive. Rather than a Rural Electrification Act, we need a Regulatory Extraction Act, getting government out-of-the way of investment, starting with relinquishing more spectrum to commercial broadband usage.
So while Susan is right that extending next-generation broadband infrastructure to every corner of our country must be a priority, she and I differ on the means to that end. 2012 is not 1936, and modern broadband is not early electricity. Rural Electrification does not offer a viable roadmap.