Should the Internet be Free?

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All subsidy schemes suffer from the same problem: government has no idea which investments will pay off in the long run.  This is no different for broadband. With a growing number of competing methods of delivering broadband to users, who knows which technology will prevail in the long run? Is Wi-Fi, Wi-Max, or LTE the best option for bringing high-speed Internet in underserved areas?  Perhaps we should be asking if government can even make these decisions.

Government plans always involve endless committee meetings, plans mired in legal jargon and favors to special interests.  The hyped technology of the day—whichever one the most constituents are clamoring for—will likely be the one favored by a publicly funded broadband scheme.  Rather than looking forward to what will earn investors the highest return in the long term, government officials suffer from a near-sightedness that allows them to see only as far as the next election.  The same institution that brought us a million bridge to nowhere will undoubtedly bring us an even bigger broadband boondoggle.

Compare this to a competitive marketplace.  When ISPs invest in broadband, they’re not gambling with other people’s money.  In fact, they’re rarely gambling.  ISPs want to make money and they try to do so amid competition, forcing them to make carefully calculated choices about which technology will work best in a given marketplace.

That kind of careful strategizing is raising the bar for Internet service in rural areas.  Entrepreneurial start-ups like LARIAT in Wyoming provide speedy, wireless broadband access to users in rural areas at competitive rates. LARIAT even maintains Wi-Fi hotspots for customers to use with their mobile devices.

When businesses make bad decisions, profits are lost, shareholders are jilted, and investment flows toward companies that are performing better in the marketplace.  When government makes a bad decision, a commissioner in Washington resigns and gets a pay raise by moving to the private sector.  Which of these institutions is better equipped to decide America’s broadband future?