Competition Best For Broadband?

“Failure to improve broadband performance could reduce U.S. productivity by 1 percent per year or more,” concludes Charles H. Ferguson in a recent Brookings Institution policy brief. The July brief addresses the pace of broadband deployment and development in the U.S. and makes several recommendations to further progress.

While Ferguson's focus is on national broadband policy, the objective is to increase access to the "last mile" services that enable, for example, videoconferencing, telecommuting, and wireless data services. Addressing last mile service capability is an area of concern for many state and local technology-based economic development initiatives, which hold future competitiveness for many regions will depend on accessibility to the nation's broadband infrastructure.

In The U.S. Broadband Problem Ferguson suggests that the broadband industry, unlike other high technology industries, has not shown sufficient technological progress. This lack of advancement is a result of the monopolistic structure of the industry and major deficiencies in policy and regulatory systems among other factors, he asserts.

The brief calls for various policy changes including structural divestiture within the industry — including breaking local exchange carriers into separate companies addressing data transport, switching operations and enhancing services — and investment incentives to help increase competition. Ferguson contends competition would, therefore, push forward technological progress within the broadband industry. He uses the rapid advances in computer technology during the 1990s as an example of competition working well.

The full policy brief can be found at http://www.brookings.edu/comm/policybriefs/pb105.htm