Business Week Prescribes More Forced Sharing for Broadband

by on September 2, 2004

Catherine Yang reports in the current Business Week that America is “Behind in Broadband” and implies that the deregulation of telephone operators is the primary culprit. She argues that “To have any hope of joining the world’s broadband vanguard, the U.S. must create a viable third competitor” to telco and cable providers. But she then suggests that forcing at least the Bells to share the infrastructure with rivals is the primary way of accomplishing this goal in the short term.

How many times and in how many ways must it be said: SHARING IS NOT COMPETING. Infrastructure sharing is not the same as infrastructure creation and innovation. Simply mandating that more “rivals” share someone else’s embedded infrastructure is hardly a sensible way to bring about the additional facilities-based competition America really needs. We don’t ask policymakers by regulatory fiat to create new car companies by forcing Ford to share their facilities with another companies at regulated rates. Instead, we expect companies to build all new facilities to compete and offer us a legitimate choice.

The most insidious thing about the forced sharing regulatory regime that the Telecom Act gave us is that it tells us to be happy with what we’ve got and not worry about the future. Just try to squeeze as much juice out of the lemons as is possible. Don’t worry about creating a whole new fruit salad of services. Well, I think that logic stinks. What we should be aiming for is all new providers, all new networks, and all new services. Wireless, VoIP, and broadband over powerline (BPL) show the way. We need more of that sort of innovation to solve America’s broadband woes, not the infrastructure socialism that Yang suggests in the Business Week piece. [By the way, I wrote a whole book about this issue two years ago if you’re interesting in reading more about the oh-so-exciting world of forced access regulation!]

P.S. Yang also has a blurb at the end of her article about broadband tax credits somehow being our salvation. Not gunna happen. Read more on that here.

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