Let the Market, Not Government, Provide Broadband to Rural Citizens

The internet is part of our everyday lives. And whether we use it to further our education or simply stay in contact with others, it has helped to connect people in remote locations with the world around them.

Still, there’s absolutely no need for the government to pretend it has the duty to provide this service. As a matter of fact, it is the very roadblocks imposed by local governments that make it difficult for companies to have a greater presence in remote areas.

In rural Indiana, broadband internet is lacking. Naturally, Governor Eric J. Holcomb saw an opportunity to step in and “make a difference” — but only after he learned of a Purdue University study that showed that the Hoosier State could make billions of dollars if rural residents had full access to the internet.

According to the study, “$3.24 billion of the total net benefit … would flow to the state and federal government through increased tax revenue and healthcare savings.” So it seems logical the governor would jump on the opportunity to increase state revenue fast by “investing” tax money in connecting the rural world.

With that idea in mind, the Holcomb administration put together the Next Level Broadband Initiative, a plan that will allocate $100 million in taxpayer dollars to offer internet to the entire state. In order to put this plan in motion, Indiana’s Director for Broadband Opportunities Scott Rudd is making the rounds, talking to reporters about the wonderful opportunities folks in rural areas will have once broadband internet is available everywhere.

“I live next to a public library,” Rudd told reporters. “Every day when I’m going to work, I see people parked in their cars with the lights on on their phones or laptops. They’re using a technology that they don’t have access to at home and that might be due to a lack of affordability.”

“Folks from children to seniors, to businesses, are struggling with this issue,” he concluded.

But in order to work on this “local economic development issue,” as he put it, the state will have to offer grants to internet providers so they may serve these remote locations — something that might have not made sense financially before the promise of government intervention. Interestingly enough, what may be keeping many potential internet service providers (ISPs) from entering the market in rural Indiana and elsewhere is the very roadblocks erected by local governments and public utilities.

In the long run, this new initiative may just be covering up for this fact and keeping locals from understanding just why some internet providers wouldn’t want to offer them access to the internet without the grants.

Municipal Monopolies and Publicly Owned “Rights Of Way”

ISPs often face a great deal of resistance from local governments.

Because of the high fees, local officials charge providers to access publicly owned land, and because of how much they have to pay public utilities to use their poles and other infrastructure, competitive, entrepreneurial companies trying to give remote locations broad access to the internet are left in the dust.  

Indiana lawmakers knew about these roadblocks, so in mid-April 2017 they passed a bill creating a program where local governments could have their communities certified as “broadband ready.” However, a quick review of the bill seems to suggest little was done to make public land more accessible to ISPs. As a matter of fact, it seems to have added more steps to the process to any group or company willing to set up broadband in certain regions.

In order to truly allow competition to help remote areas have better access to internet service, all the state should have done was to adopt the “open access” approach. That would entail open access to publicly owned rights of way, allowing ISPs to cut the potentially prohibitive costs of setting up in certain municipalities.

By removing roadblocks, the state would also cut expenses. After all, these grants are being taken from taxpayer-backed funds. And even if the initial “investment” does pay off, as the Purdue University study stated, officials will still have to pay for these grants with public funds and it might take years, perhaps decades, for the state to reap the benefits of this plan.

How about getting rid of the middleman altogether and letting the market do its job?

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